The Algerian president, Abdelaziz Bouteflika, has withdrawn his bid for a fifth term in office after mass protests against his rule and postponed elections scheduled for April to allow for consultation on reforms “for a new generation”.

Bouteflika made the surprise announcement on Monday in a letter to the Algerian people released by his office. The 82-year-old leader, who has been in power for two decades, acknowledged three consecutive weeks of demonstrations against his rule in which hundreds of thousands of people from across Algerian society took to the streets.

“I understand the motivations of the many people who chose this method of expression,” Bouteflika said in the letter, praising the peaceful nature of the protests before promising sweeping constitutional and political changes.
“This new system and new republic will be in the hands of a new generation of Algerians,” he said, promising a national conference lasting until the end of this year to find his successor.

Video posted online showed stunned citizens in Algiers’ central Audin Square waving their arms with joy to a chorus of celebratory car horns.

“It is great news! I’m both happy and confused because there’s still so much more that needs to happen,” said Nourhane Atmani, a student who took part in the protests. “Refusing Bouteflika’s fifth bid was just a step. The people need to unite to choose what’s next.”

As Bouteflika made his announcement, the prime minister, Ahmed Ouyahia, resigned and was replaced by Noureddine Bedoui, previously the interior minister, Ennahar TV reported on Monday. Ramtane Lamamra, who was Bouteflika’s diplomatic adviser, was appointed deputy prime minister, it said.

Bouteflika arrived back in Algeria late on Sunday night after two weeks of medical treatment in Geneva, returning to a country beset by protests and a general strike. Last Friday hundreds of thousands of people took to the streets, marking the third week of demonstrations against his rule.

What began as protests against his bid for a fifth term as president quickly expanded into opposition to the entire regime around the infirm leader, and some young demonstrators said on Monday they were not entirely satisfied with Bouteflika’s proposal.

“It’s one small battle won,” said Yasmine Bouchene, of the collective Les Jeunes Engagés (Activist Youth). “Bouteflika asked for another year and he got his way. But we are willing to keep on fighting,” she said.

There is widespread resentment at the perceived incompetence and corruption of the Front de Libération Nationale (FLN), the party that has been in power for more than 50 years. Several FLN parliamentarians resigned on Friday to join the protest movement.

Bouteflika had previously warned protesters of the risk of infiltration by “misleading parties” leading to chaos not seen since the civil war. He had offered to hold another election to choose his successor if re-elected in April.

But in the letter on Monday night, Bouteflika cancelled the 18 April vote. He said this would calm tensions, allow the country to move forward along a path of “serene, calm and public security”, and let Algerian institutions “prepare as quickly as possible for the advent of a new era in Algeria”.

Bouteflika said the government would organise a national conference under the direction of an independent presidential commission. “This will independently decide the date of the presidential election, in which I will not be a candidate in any instance,” he said.

The conference will be accompanied by a national referendum to rewrite the constitution. In the meantime, Algeria will be governed by an interim government to oversee the country’s day-to-day institutional function.