The BBC director-general has resigned after a Newsnight report wrongly implicated former Conservative Party treasurer Lord McAlpine in a child abuse scandal.
George Entwistle said the "wholly exceptional" events of last week had convinced him he should stand down.
He made the announcement outside New Broadcasting House at 9pm, alongside BBC Trust chairman Lord Patten.
He told reporters: "When appointed to the role, with 23 years' experience as a producer and leader at the BBC, I was confident the trustees had chosen the best candidate for the post, and the right person to tackle the challenges and opportunities ahead.
"However, the wholly exceptional events of the past few weeks have led me to conclude that the BBC should appoint a new leader."
Lord Patten said it was "one of the saddest evenings of my public life".
"At the heart of the BBC is its role as a trusted global news organisation," he continued.
"As the editor-in-chief of that news organisation George has very honourably offered us his resignation because of the unacceptable mistakes - the unacceptable shoddy journalism - which has caused us so much controversy.
"He has behaved as editor with huge honour and courage and would that the rest of the world always behaved the same."
Culture Secretary Maria Miller said it was a "regrettable situation, but the right decision".
She added: "It is vital that credibility and public trust in this important national institution is restored. It is now crucial that the BBC puts the systems in place to ensure it can make first class news and current affairs programmes."
There was some support for Mr Entwistle. Labour former culture secretary Ben Bradshaw described his resignation as a "terrible mistake".
He wrote on Twitter: "The departure of George Entwistle is a dreadful injustice and a terrible mistake. Who will sort the mess out now?"
Newsnight presenter Jeremy Paxman said in a statement: "George Entwistle's departure is a great shame. He has been brought low by cowards and incompetents.
"The real problem here is the BBC's decision, in the wake of the Hutton Inquiry, to play safe by appointing biddable people. They then compounded the problem by enforcing a series of cuts on programme budgets, while bloating the management. That is how you arrive at the current mess on Newsnight."
He added: "I very much doubt the problem is unique to that programme. I had hoped that George might stay to sort this out. It is a great pity that a talented man has been sacrificed, while time-servers prosper."
Tim Davie, the BBC's director of audio and music, will take over as acting BBC director-general.
When grilled by BBC presenter John Humphrys on Saturday morning about the Newsnight child abuse report, Mr Entwistle admitted he did not know about the investigation until the day after it was broadcast, and had not seen newspaper reports casting doubts on the probe.
Mr Entwistle, who had been in post for less than two months, has spent virtually the entire time trying to deal with the fall out from the Jimmy Savile child abuse scandal.
One of the first issues his successor will have to deal with is an emergency report commissioned into what happened over Newsnight's report on the Bryn Estyn children's home scandal which had been due to land on Mr Entwistle's desk on Sunday.
:: BBC Trust Chairman Lord Patten will appear on Murnaghan on Sky News at 10am