"Tonight I am standing down as Foreign Secretary after four years to serve as Leader of the House of Commons," Hague wrote on Twitter last night, adding that he would not stand as a member of parliament in the next UK general election.
Hague, who will remain in the cabinet as Leader of the House of Commons, said "Renewal in politics is good and holding office is not an end in itself".
Fresh from his last week visit to India, Hague's recent years have seen him involved with numerous diplomatic efforts including Ukraine and, more notably, Syria.
Hague's expected replacement has been touted as current Defence Secretary Philip Hammond.
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The Conservative Party leader from June 1997 to September 2001, Hague served briefly in the cabinet of former British Prime Minister John Major. He became Foreign Secretary in the aftermath of the Conservative Party and Liberal Democrat election victory in 2010.
Hague famously made his debut on the political stage at the age of 16, giving a speech at a 1977 party conference in front of then-leader Margaret Thatcher.
The cabinet reshuffle is expected to be used as an opportunity for Cameron to fill more government roles with women.