Teshome, 63, took office in 2013 and had often spoken for a more democratic and inclusive government in the Horn of Africa country, which has faced political upheaval and unrest for many years.
The office of the Prime Minister leads Ethiopia's government and policy.
Lawmakers in the upper and lower houses of the country's parliament will meet to consider Teshome's resignation on Thursday, Ethiopia's News Agency reported.
Teshome is a member of the Oromo People's Democratic Organization, one of the four parties of the ruling coalition Ethiopian People's Revolutionary Democratic Front.
Teshome had previously taken ministerial and high-level diplomatic positions, representing the country in Japan and Azerbaijan.
He was Ethiopia's ambassador to Turkey before he was unanimously appointed president.
Teshome's resignation comes after a political Cabinet reshuffle by Ethiopian Prime Minister Abiy Ahmed that began last week and has seen half of the country's ministerial seats occupied by women.
Abiy, 41, currently the continent's youngest leader, has taken radical steps since he took office in April, most recently the appointment of a female defense minister, the first for the nation.
He has freed many jailed journalists, bloggers and political prisoners arrested by previous administrations, along with honoring an agreement that ended a 20-year bloody border war with neighboring Eritrea.
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