Anderson held a meeting with government colleagues Thursday morning in the national capital Canberra and then announced to parliament he was standing down as deputy prime minister and leader of the rural-based Nationals, the junior coalition partner -- both posts he has held for six years.
He will also resign as minister for transport and regional development but will remain on the backbench until the next elections due in 2007, he said. The resignations will take effect in mid-July.
As transport minister, Anderson had often railed against what he branded unfair competition in the global aviation industry which he said was damaging to national carrier Qantas.
As a parting shot Thursday, he called the industry "highly corrupt" and said Sydney-based Qantas needs greater access to key airports in Britain and Europe.
"I am really concerned that Qantas ... just doesn't have the access it needs into Europe and into London," he told reporters.
He told parliament he was resigning because he has for several years suffered what he described as a debilitating but benign prostate condition.
"It is not life-threatening, but the clear medical advice given me is that it will not improve so long as I lead the lifestyle that comes with being not only local member, but minister
"I simply do not want it to become any more troublesome, for my own sake, let alone for my family's."
Thursday night, Nationals lawmakers elected Mark Vaile as the new party leader. Anderson had earlier recommended him for the post.
"He has my total backing as the next leader and he will bring energy, insight and commitment to the job," Anderson said.
The Nationals' leader automatically becomes deputy to the leader of the dominant Liberal Party in the center-right coalition government. It is not immediately clear who would replace Anderson as transport minister.
Prime Minister John Howard said Anderson's resignation was a "very sad day" for politics and paid tribute to his efforts to improve transport links throughout Australia and his role in initiatives to improve water supply in the arid Australian countryside and boost services to remote rural Australian communities.
"I lose as the deputy prime minister and therefore a very close Cabinet and government colleague, a man for whom I have a profound personal regard and affection," Howard said.
After years of waning political fortunes blamed on economic and population decline in the Outback as well as the emergence of the right-wing protectionist party One Nation, Anderson managed to increase the Nationals' federal representatives by one to 17 at elections in October last year.
