Olofsson stated at a press conference today that she will make her position available at the party's upcoming congress in September.
"I'm satisfied, after ten and a half years as Centre Party leader. Now I'm looking forward to spending some time with my husband and children," said Olofsson at the press conference.
It is as of yet unclear if Olofsson will stay on as enterprise minister following the announcement of her resignation.
"I'd like to stay on as enterprise minister, but that's for the new party leader to decide," she said.
Olofsson has been the Centre Party's leader since 2001, when she took over from predecessor Lennart Daléus.
During her years as party leader, the Centre Party has moved further towards the right-wing of the political scale, and now has a more liberal profile.
Since Olofsson took over the reins, the party has re-evaluated views on tax politics and EU politics, as well as toning down previous profile questions such as the firm resistance to nuclear power.
The Centre Party has formed part of the centre-right Alliance, which has governed Sweden since 2006.
In the latest election the Centre Party received 5.65 percent of the vote.
Voices demanding Olofsson's resignation have previously been heard from prominent Centre Party members such as MP Fredrik Federley.
Olofsson herself comments that election campaigns are tough work, and that an important part of being a leader is knowing when to quit.
"There's a new generation that can take over," she said.