The long-serving TD resigned from her post after an internal meeting in the Dáil this afternoon after a disastrous election campaign cut short her time in charge less than two years after she replaced Eamon Gilmore.
It is widely believed that current deputy leader Alan Kelly will enter the race to succeed the ex-tánaiste, while former junior minister Seán Sherlock is also believed to be in contention.
However, it remains unclear whether ex-public expenditure minister Brendan Howlin — who has widespread support among TDs — will run as he does not want to take part in another bruising leadership race after losing in 1997 and 2002.
Ms Burton told a recent fractious meeting of Labour election candidates she would make a decision on whether to try and stay on or step down once a government is formed.
The Labour leader's announcement officially starts the leadership race.
The move is required because under Labour’s party constitution, it must hold a leadership contest within six months of leaving government.
After today’s announcement, Ms Burton — who will remain on until her successor is found — will pass on responsibility for finding a replacement to Labour’s executive board.
This board will give Labour’s six other TDs a number of days to decide on who wants to put their name forward — a bid which must be seconded by another TD.
If only one consensus candidate is put forward, a new leader could be in place within a fortnight.
However, in the likely event that at least two candidates go forward, a leadership contest — and a tied in deputy leadership race — will begin with all grass-roots party members given one vote, and must conclude by August 26 at the latest.
It is widely expected current deputy leader Alan Kelly will put his name forward, while rumours persist Seán Sherlock may follow suit.
However, it remains unclear whether ex-public expenditure minister Brendan Howlin will take part as he is believed to only want to run if he will be automatically selected.
Labour TD and chairman Willie Penrose paid tribute to Ms Burton last night, saying she will always remain a strong activist for the party.
However, while saying “I would like anyone chosen to be by consensus” should a leadership change occur, he declined to say who he wishes to back.
Poll: Who do you feel would be a good choice as the new leader of @labour Party?— Irish Examiner (@irishexaminer) May 10, 2016