Papua New Guinea Prime Minister Peter O'Neill announced his resignation on Sunday after weeks of high-level defections from the ruling party.

O'Neill's opponents said on Friday they had mustered enough support in parliament to oust him over a range of grievances including a gas deal with France's Total, which critics have questioned.

Political instability is something of a fixture in the resource-rich but poverty-stricken South Pacific nation and O'Neill, who had been leader since 2011, had seen off previous attempts to topple him.

He handed over leadership to Sir Julius Chan, ABC News reported.