Reg Empey has agreed to stay on as Ulster Unionist Party leader for the short-term but announced he will step down from the position before the party's annual conference in the autumn.
A spokesman said that over the summer the party will conduct a review of all its relationships and policies and devise a strategy for next year's Assembly elections.
There had been speculation that Mr Empey would step down after the UUP and Conservative Party alliance failed to win any of Northern Ireland's 18 seats in the Westminster election.
The former businessman was narrowly defeated in South Antrim by William McCrea of the Democratic Unionist Party.
Strangford MLA David McNarry declared the leader 'finished' after the election.
Assembly member Basil McCrea has questioned whether the party should continue its relationship with the Conservatives.
New British Prime Minister David Cameron is expected to arrive in Northern Ireland next week.