Valdis Dombrovskis' decision yesterday means that his center-right government automatically falls. He is the longest serving prime minister in Latvia's history.
Last week's collapse of the Maxima supermarket was the worst disaster since Latvia declared its independence from Soviet Union in 1991, and has caused a storm of outrage from Latvians.
Police have opened a criminal investigation into the cause of last week's tragedy. Possible explanations for the disaster include a flawed design, substandard construction materials, and corruption.
Dombrovskis came to power in 2009 as Latvia's economy was sinking into a deep recession and was charged with leading harsh budget cuts and tax increases while at the same time implementing tough structural reforms demanded by international organisations such as the International Monetary Fund.
Dombrovskis was re-appointed twice as prime minister since then, and is widely credited with preventing the small Baltic nation from going bankrupt.
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