Former Nova Scotia premier Darrell Dexter is stepping down as the leader of the Nova Scotia New Democratic Party.

He made the announcement at Maureen MacDonald's constituency office on Saturday morning. His resignation is effective Nov. 23.

In the last provincial election Dexter lost his Cole Harbour-Portland Valley seat by 21 votes as the New Democrats were relegated to third-party status with seven elected members.

Voters in Nova Scotia dumped the NDP after giving Dexter an historic election victory four years ago.

Dexter became premier after the June 2009 election, but his popularity with the public was quickly tested when he went back on a promise not to raise the harmonized sales tax, a measure he said had to be taken to turn around the province's poor fiscal state.

On Oct. 8, Nova Scotians voted the Liberal party into power, marking the first time in 131 years that Nova Scotians hadn't given an incumbent party a second chance at running the province.

Dexter said his party couldn't overcome a stagnant economy.

'As much as you'd like to wave a magic wand and create jobs it actually doesn't happen that way.- Darrell Dexter

"You know, as much as you'd like to wave a magic wand and create jobs it actually doesn't happen that way. You have to do the foundational stuff in order to get to prosperity," he said.

Dexter is a former journalist and lawyer. He was first elected in 1998.

MacDonald, a long time NDP MLA, is taking over as interim party leader.

No date has been set for a leadership convention.

Progressive-Conservative Leader Jamie Baillie sent out a release thanking the former premier.

"While he and I did not always agree, I know he had the best interests of Nova Scotians at heart," wrote the Opposition leader.

"I  wish him well as he begins a new chapter in his life."