"I have decided to leave the PD and to build together with others a new house to do politics differently," Renzi wrote on Facebook, barely a week after the PD's coalition with the Five Star Movement (M5S) won a confidence motion in parliament.
Renzi is not himself part of the new government, formed through the unlikely PD-M5S alliance in order to thwart far-right leader and now ex-interior minister Matteo Salvini's bid to call snap elections he thought would make him premier.
But Renzi, who was hailed as a reformer when he became Italy's youngest premier at the age of 39 in 2014, was a divisive figure within the PD, particularly for the party's left which is largely loyal to party leader Nicolas Zingaretti.
"After seven years of friendly fire I think we must take note that our values, our ideas, our dreams, cannot every day be the object of internal quarrels," Renzi wrote.
He resigned as premier in 2016 and fraught relations within the PD prompted repeated speculation that Renzi would split to form his own, more politically centrist, party.
"The victory we got in parliament against populism and Salvini was important to save Italy, but it's not enough," Renzi wrote.
Italian media reported that around 30 lawmakers might announce loyalty to Renzi, but that he said he would continue to support Prime Minister Giuseppe Conte's government.