TORONTO—Canadian Prime Minister Justin Trudeau said on Monday that he will resign after almost a decade in power, bowing to members of his party who have been calling on him to step aside ahead of an election later this year.

The Canadian leader would exit as one of the most unpopular political figures in the country, leaving his party in a weakened position and his country facing an uncertain economic future, as Donald Trump takes power in the U.S. The president-elect is promising, among other measures, to impose 25% tariffs on Canadian imports.

Trudeau is the latest standard-bearer for progressive politics to suffer from a voter backlash, amid economic retreat, discontent with aggressive climate policies and a growing resistance to immigration.

Trudeau’s hold on power grew tenuous last month, after the left-leaning New Democratic Party, which had been propping up his minority government, said it was withdrawing its support.

That setback came only days after the resignation of the finance minister, Chrystia Freeland, who stepped down because she disagreed with Trudeau’s spending proposals. Freeland, who was also deputy prime minister, said she left the cabinet because she thought Trudeau wasn’t taking adequate steps to prepare for a possible trade war with Washington.

Members of his party have also become more vocal in calling for Trudeau to step aside, as the Liberal Party’s poll numbers plummet. Voters blame Trudeau for rising costs and housing shortages that were aggravated by looser immigration policies.

Public opinion polls released in late 2024 and early this year indicate Trudeau’s approval rating fell to about 20%, and the Liberal Party trails the Conservatives by over 20 percentage points.

Liberal lawmaker Wayne Long said the Liberal Party under Trudeau has swung too much to the left on the political spectrum, much like the Democrats in the U.S.

“I don’t want to use the word wokeism, but we’ve doubled down on things where we’ve come out as a moral authority,” said Long, who isn’t seeking re-election this year. “People are tired of it. It doesn’t mean that they’re right and we’re wrong, but reality bites, and reality sometimes sucks.”

Write to Vipal Monga at vipal.monga@wsj.com and Paul Vieira at Paul.Vieira@wsj.com