Shadow home secretary David Davis will resign as an MP to fight a single-issue by-election campaign on the government's anti-terrorism laws.
Speaking outside the Houses of Parliament, the Haltemprice and Howden MP said he would stand in the resulting by-election to create an effective referendum on plans to detain terror suspects without charge for six weeks.
The move has not been made without the approval of the shadow Cabinet or Conservative party. Tory leader David Cameron said he thought Mr Davis had made a "very courageous. [and] brave decision" but added it had been a "personal" one.
Liberal Democrat leader Nick Clegg said his party, which is second in the constituency, will not contest the by-election. He currently has a majority of 4,527.
Labour home secretary Jacqui Smith said the Conservatives had "collapsed into total disarray" on the issue, calling on Mr Cameron to "come clean on what has really happened". It is not yet clear whether Labour will field a candidate to challenge Mr Davis in the expected by-election.
Former shadow attorney general Edward Garnier told politics.co.uk: "I am shocked and surprised as most people would be. It has come as a bolt out of the blue. I've heard the secretary has just made a statement and I can entirely understand his reason for his resignation.
"The detail of what happens between now and the date of the by-election is yet to be worked out but certainly this is a momentous day for modern British politics."
The development comes one day after Mr Davis fronted the opposition's challenge to the government's proposed change on the pre-charge detention limit for terror suspects from 28 to 42 days.
Speaking outside parliament because the speaker would not let him make the statement to the Commons, Mr Davis said the attempt to block the 42-day terror detention proposals was a "noble endeavour".
"We defended the freedoms of the British people - or we did, up until yesterday.
"This Sunday is the anniversary of the Magna Carta - the right not to be imprisoned by the state without charge or reason.
"The counterterrorism bill will in all probability be rejected by the House of Lords very firmly. But because the impetus behind this is essentially political not security the government will be tempted to use the Parliament Act to overrule the lords. It has no democratic mandate to do this since 42 days was not in the manifesto."
He continued to describe the 42-day pre-charge detention proposals as the most salient example of the "insidious, surreptitious and relentless erosion of fundamental British freedoms".
The home affairs spokesman said the UK had a larger DNA database than military dictatorships around the world, while assaults on jury trials and arbitrary abuse by the state were widespread.
He explained the by-election would be used as a protest against the "slow strangulation" of British freedoms by the Labour government.
"That may mean I have made my last speech to the house. And of course that would be a cause of deep regret to me. But at least my electorate and the nation as a whole would have had the opportunity to debate and consider one of the most fundamental issues of our day.
"If they do send me back here, it will be with a single, simple message - that the monstrosity of the law that we passed yesterday will not stand."
Mr Clegg said he had been approached by Mr Davis on the issue and that the Lib Dems will not stand a candidate against the former Tory frontbencher as a result.
"David Davis' decision to resign his seat and fight a by-election over the issue of 42 days is a dramatic move. I am grateful to him for having informed me following the vote of his intention to take this step," he said.
"The Liberal Democrats have consistently opposed this unnecessary and illiberal proposal which poses a threat so serious to British liberties that it transcends party politics."
Mr Davis lost out in the Tory party's 2005 leadership election to David Cameron but has remained a prominent frontbencher since then.