Huber held a press conference on Tuesday morning to announce his pending resignation after he and other party leaders met for an emergency meeting on Monday evening.
“It was always my goal during my 13 months as CSU party chairman to keep the CSU stable and fit for the future,” he said, adding that he wanted to give the conservatives in Bavaria “chance for a new beginning at the top.”
The CSU won over 43 percent of the vote on Sunday, but lost the absolute majority it has held in Bavaria for nearly half a century.
The news agency DPA reported Huber's successor will be German Agriculture Minister Horst Seehofer, who will now lead the party's campaign in the federal election in 2009.
Bavarian state Premier Günther Beckstein will remain in office despite the loss of the party's historic majority on Sunday, but general secretary Christine Haderthauer will also lose her position in the party.
The election result could prompt discord within the conservatives in the run-up to the September 2009 national vote and might exacerbate tensions within Merkel's three-year old "grand coalition" of conservatives and the centre-left Social Democrats.
Both Huber and Haderthauer will officially give up their duties at the CSU party congress on October 25 in Munich.