"I will not participate in any electoral politics. There are many other leaders to take forward the work which I and other senior leaders have been doing," he said. Vajpayee's surprise announcement came one day before the expected resignation of main opposition leader Lal Krishna Advani as BJP chief.
The 81-year-old Vajpayee stepped down as prime minister last May after the BJP suffered a stunning defeat at the hands of the Congress party in national elections.
After the party's defeat, senior leaders like Vajpayee and Advani became steadily marginalised in the party. Vajpayee's last tenure as prime minister from 1999 to 2004 was one of the most eventful in the country's history during which India conducted nuclear tests, made strides towards peace with Pakistan and achieved major economic progress.
He held office twice briefly before that -- once for 13 days in 1996 and also for one year in 1998.
A bachelor and former journalist, Vajpayee was a founding member in 1951 of the right-wing BJS (Indian People's Society), the BJP's predecessor.
BJS president for a decade until 1973, he was jailed in 1975 along with thousands of political activists when then Congress prime minister Indira Gandhi imposed emergency rule in India. He was freed two years later.
A skilled orator in Hindi, Vajpayee said, after stepping down as prime minister, that he would love to resume writing poems.