Michael Gunner has resigned as chief minister moments after handing down the Northern Territory budget, saying his head and heart are no longer in the job.

The first territory-born Top End leader attributed the decision to the birth of his second son, Nash, on April 29 and wanting to spend time with his family.

Mr Gunner, 46, said a heart attack in January 2020, coupled with the COVID-19 pandemic had taken a toll and he was tired.

“It has caused me to reflect a lot over the past few weeks. I’ve always given 100 per cent to this job and anything less is short-changing the people that sent me here,” he told reporters on Tuesday.

“I can no longer keep looking Territorians in the eye and say ‘I can keep giving 100 per cent every day’, and if I can’t do that I shouldn’t be in the chair.”

Mr Gunner said he didn’t need a “second near-death experience to know life is unpredictable and can be cut short”.

“When I held Nash for the first time, that was it, game over. I knew straight away that I was done,” he said.

“I am not going to stay in the job longer than I need just for the cheque or the ego.”

Mr Gunner said he was still young for a politician but old to be the father of a newborn and a toddler, Hudson, and would now go back on paternity leave.

“That is who I want to spend more of my time with now for as long as I can,” he said as tears welled in his eyes.

The announcement came almost immediately after the Labor leader, originally from Alice Springs, delivered the NT’s budget for 2022/23.

After his budget speech to parliament, Mr Gunner told the house it was the right time for him to go, but he would remain in parliament as the Member for Fannie Bay.

“My head and my heart are no longer in the job. They are at home,” he said.

Deputy Chief Minister Nicole Manison will serve as acting chief minister, with a new parliamentary Labor leader to be determined on Friday.

She thanked her colleague and said she was proud to also call him a friend.

“I think Michael will leave an outstanding legacy of being a transformative chief minister. It has been an honour. You are a legend,” she said.

“Somebody who has set the foundations, economically and socially, so our kids grow up with more opportunities.”

Ms Manison is strongly favoured to take the position but she batted away questions about the job, saying it would be determined by the Labor caucus.

Mr Gunner was first elected to the NT parliament in 2008 and became opposition leader in 2015.

He led Labor to a landslide victory in 2016 before his government was returned easily in 2020, partly on the back of its handling of the pandemic. 

Mr Gunner said he loved the territory because it was a place of potential and possibility.

“It doesn’t matter who you are, you can have a crack and make something of yourself,” he said.

“I like to think my own story shows that. A kid who grew up in public housing, who stacked shelves to get himself through uni, can serve the territory as its chief minister.”

Gunner departs top job to praise, censure

Business groups and colleagues have praised the outgoing Gunner, but others have branded his environmental record a failure.

There’s been mixed reaction to Mr Gunner’s decision to resign from the top job for personal reasons.

The first territory-born Top End leader on Tuesday said he wanted to spend more time with his family after steering the territory through the COVID-19 pandemic and a heart attack.

Labor colleagues praised Mr Gunner, including former federal leader Bill Shorten, with his deputy and likely replacement Nicole Manison calling him a legend. 

But others said good riddance to the 46-year-old, who grew up on the rough side of Alice Springs, while calling for a new direction on crucial territory policies, like gas fracking.

“Gunner put big fracking companies ahead of Aboriginal people’s right to protect water and sacred sites and self-determine what happens on our country,” said Johnny Wilson, chair of Nurrdalinji Aboriginal group. 

The Lock the Gate Alliance criticised Mr Gunner for failing to implement all the Pepper Inquiry recommendations after a far-reaching scientific probe into the NT’s gas fracking industry.

“His replacement must chart a different course. Territorians need a brave chief minister who is willing to stand up to Canberra and make decisions that are in the NT’s best interest,” a spokesman said.

NT Opposition Leader Lia Finocchiaro said although the timing was “shambolic” and “lacked statesmanship”, the news was welcome relief for thousands of Territorians, who felt abandoned.

“Gunner’s resignation comes after mounting pressure from the opposition and Territorians, highlighting Labor’s catastrophic failures on crime, economy, cost of living pressures, health, government integrity and COVID,” she said.

“The reality is, Michael Gunner should have resigned years ago.”

Former jogging partner, Mr Shorten, was more supportive as he reflected on his “great territory story”.

“First territory born kid to grow up and become chief minister,” he said via social media.

“Starting out in modest circumstances and doing it tough. Led remarkably during COVID. Go well, to a good friend and Darwin running buddy.”

The Minerals Council of Australia also spoke warmly of Mr Gunner, saying he was strong advocate and supporter of the NT’s mining industry.

“He has long understood how important the sector is to the territory economy by creating jobs, supporting local businesses and via the payment of royalties,” executive director Cathryn Tilmouth said.

It was echoed by Alex Bruce at Hospitality NT, who thanked Mr Gunner “for steering the territory through the global pandemic” which “helped us fair better than most Australian jurisdictions”.