Tokyo, Japan (CNN) -- Japanese Prime Minister Naoto Kan, whose approval rating tumbled following the devastating March earthquake and tsunami, announced his resignation Friday.

Kan announced he is stepping down as party leader during a meeting with members of the ruling Democratic Party of Japan. The party will elect a new leader next week, who will take over as prime minister.

The resignation fulfills his promise to step down after parliament approved two pieces of legislation, including one related to post-earthquake reconstruction.

"I will put my words into action once those two bills are approved," Kan said this month at a Lower House committee session.

Kan believes the two bills -- the deficit-financing bond bill and the new energy promotion bill -- will push forward his reconstruction policies.

The bills passed Friday.

Kan has been under pressure to resign since the March 11 earthquake and tsunami and subsequent nuclear crisis in the nation. The disaster triggered the worst nuclear crisis since Chernobyl, as cores overheated and spewed radioactive material into surrounding areas.

Soon after the disaster, ratings agency Moody's put the country debt under review for a possible downgrade, as political infighting undermined measures to fix the budget deficit. Moody's officially downgraded Japan's credit on Wednesday, citing its unstable politics

In June, the embattled leader narrowly escaped a vote of no confidence in parliament.

As many as nine candidates, including Finance Minister Yoshihiko Noda and former foreign minister, Seiji Maehara, are considered possible contenders for the post of prime minister.

Kan's resignation allows him to remain in office until the ruling party elects its new leader, a move scheduled for Monday.

A day later, parliament will vote in the new leader as prime minister, the sixth premier for the nation in five years.

Japan's next prime minister will inherit a series of problems, including soaring debt, nuclear woes, a shrinking population and a nation struggling to rebuild after the devastating earthquake and tsunami.