Japan's Prime Minister Yukio Hatoyama announced Wednesday his decision to resign in a general assembly of ruling Democratic Party of Japan (DPJ) lawmakers.

Hatoyama's support rate plunged below 20 percent after being blamed for dividing the ruling coalition due to his mishandling of a plan to relocate a U.S. military facility in Okinawa, causing the Social Democratic Party to bolt from the coalition and reposition themselves to oppose the DPJ in the forthcoming election.

Hatoyama said his management body's alleged false reporting of his political fund has also tainted the image of DPJ, another factor to his decision of resignation.

"We should try to rebuild a clean DPJ so that our people will listen to us," Hatoyama said.

"Because of the Futenma issue, I lost trust from my people," Hatoyama said in tears, adding "I have been and will continue to make efforts."

"I don't believe in the next 50 or 100 years Japan will still rely on the United States for defense...although the Japan-U.S. alliance is important, we should not give up trying," he said.

Hatoyama also asked DPJ Secretary-General Ichiro Ozawa to resign due to his mishandling of the political fund issue.

Analysts said Deputy Prime Minister Naoto Kan is likely to succeed Hatoyama as the new premier.

Hatoyama is the fourth Japanese prime minister to step down in four years.