UPDATED: Labour's David Cunliffe has resigned from his position at leader of the party.

Cunliffe made the announcement this afternoon after he fronted the party's ruling council.

Labour Party leader David Cunliffe.

In a statement released this afternoon, Cunliffe says he decided to resign the leadership of the Labour Party, effective from the end of caucus on Tuesday.

"The party has suffered an historic election loss and in resigning as leader I take responsibility for that.

"The party will review all the contributing factors. That process has begun and I give it my full support."

He says Labour's values are New Zealand's values, but the election result has reinforced that the Labour Party must change in order to uphold and communicate those values.

"I was elected one year ago with a mandate to lead change. In that time I have worked to pull the party and caucus together and put every resource available to the service of the campaign.

"Clearly there is much more to do, and the party's direction must be respected. There is no room for division or airing differences through the media despite agreement to the contrary.

"The recent election confirms that Labour needs a more comprehensive overhaul. We need to renew and rebuild our culture, accountabilities, how we do things and present to the world."

Cunliffe says achieving that in time for the 2017 election will require experienced and determined leadership with a broad mandate.

"Whatever decisions are made must be in the best interests of New Zealand to have a strong and vital Labour Party.

"The Party's interests must come before any personal interests. I have thought carefully before responding to the calls to re-offer myself for the leadership of the party.

"Consultation with colleagues, members and affiliates has affirmed that the whole party must participate in this choice, and not just one part of it.

"Therefore I am announcing today that I will nominate for a primary contest, which will be held across the caucus, the party membership and the affiliates as the party constitution requires."

The process is a matter for the party Council.

Earlier:

Labour Party leader David Cunliffe will front the party's ruling council this afternoon where it's expected he will stand down as leader.

The statement about his future will be made at 2.30pm.

Cunliffe has been under pressure to resign after Labour failed to defeat the National Government in the 2014 General Elections last weekend.

His options are to resign and seek a fresh mandate by standing again; resign and pull out of the race; or resign and take time to consider his position by leaving the timing of a leadership race in the hands of the council, reports Fairfax.

The third option would give the council room to delay a leadership contest till after a formal review into the party's disastrous election performance has been held.

Stuff reports, Cunliffe's deputy, David Parker, would be the obvious caretaker leader in the interim.

A fourth option could see Cunliffe quit Parliament altogether, forcing a by-election in his New Lynn seat.

Wellington Central MP Grant Robertson is Cunliffe's rival for the top job with Jacinda Arden as his deputy.

SunLive will have Cunliffe's announcement later this afternoon.