Graeme Hendry, who has led the SNP on Glasgow City Council since 2012 and had been deputy in the year before that, will stand down at his group's annual general meeting in a fortnight.
Cllr Hendry is also expected to leave front line politics at the next election. He has just become a father for the second time and has complained to friends and colleagues of the impact of his workload on family life.
It is understood that at least one other senior councillor in Glasgow will also quit at the next poll, in 2017, to pursue interests elsewhere. Senior sources said the departure of at least two prominent politicians from the highest-profile council in the country was a poor indictment of local government's ability to attract and retain talent.
Cllr Hendry said: "Being leader of the SNP group has been a privilege and the decision to stand down at our AGM has not been an easy one, but it is the right one for me and my family.
"Over the last two years we have scored notable hits, from pursuing Labour over the George Square debacle and closures of day centre's to trying to stop their recent attempts to intimidate staff taking industrial action."
One source said: "Graeme and some others know there's a bigger world out there. They see some of the older councillors scurrying around for a bit of power here and there and want something else."
Cllr Hendry is expected to be succeeded by his group's social work spokeswoman Susan Aitken.