Angela Merkel will step down as German chancellor in 2021 following a pair of state election debacles.

“I will not be seeking any political post after my term ends,” Ms Merkel told a news conference in Berlin on Monday morning (AEST).

Ms Merkel, who has led Germany since 2005, also said she would not seek re-election as leader of the centre-right Christian Democratic Union (CDU) party in December. She has held the post since 2000.

The CDU was severely weakened in an election in state of Hesse on the weekend, the latest in a series of setbacks.

Both the CDU and its coalition partners, the Social Democrats, were 10 percentage points down on the previous poll there.

The Hesse election comes just weeks after Ms Merkel’s sister party, the CSU, major losses in a Bavarian state vote.

Ms Merkel had previously indicated at a party congress in December that she planned to seek another two-year term as CDU leader.

Ms Merkel’s predecessor, Gerhard Schroeder, stepped down as leader of his centre-left Social Democrats in 2004 as his government struggled, but remained chancellor.

For years, Ms Merkel insisted that the chancellor should also be party leader.

Ms Merkel currently governs Germany in a “grand coalition” of what traditionally have been the country’s biggest parties – the CDU, its Bavaria-only sister, the Christian Social Union, and the Social Democrats.

Her fourth-term government only took office in March, but has become notorious for squabbling.

Sunday’s election in the central state of Hesse saw both Ms Merkel’s conservative CDU and the centre-left Social Democrats lose significant ground, while there were gains for both the Greens and the far-right Alternative for Germany.

Ms Merkel’s party managed an unimpressive win, narrowly salvaging a majority for its regional governing coalition with the Greens.

The debacle followed a battering in a state election in Bavaria two weeks ago for the CSU and the Social Democrats.

The Social Democrats’ leader, Andrea Nahles, demanded on Sunday a “clear, binding timetable” for implementing government projects before the coalition faces an already-agreed midterm review next fall.

Ms Nahles declined to comment on reports that Merkel might step down as CDU leader. The chancellor is scheduled to hold a news conference later in the day.

-with AAP