She also said she would stand down as chancellor once the current legislative term ends in 2021.
News agency dpa cited unidentified party sources as saying Merkel told an ongoing CDU leadership meeting that she's prepared to step down as party leader but intends to remain chancellor.
Sources quoted in German media say she will not seek re-election as party chairwoman at a conference in December.
As her troubles have multiplied since the migrant crisis, observers have asked whether Merkel, rather than be pushed out, will know when it is time to hand over the crown.
"The election was a success on all fronts", the AfD's Hesse leader, Joerg Meuthen, said.
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Merkel told reporters that being Chancellor has been a "very challenging and fulfilling task". Her fourth-term government, which took office in March, has become notorious for infighting. Merkel's favoured successor is CDU party secretary general Annegret Kramp-Karrenbauer.
She has also said this will be her final parliamentary term as German chancellor, according to reports.
Merkel, who has headed the CDU for 18 years, had until now always indicated that she believed the posts of party leader and chancellor should be held by the same person. He governs Schleswig-Holstein in a three-way coalition with the pro-business Free Democratic Party and the environmental Greens-a model that Merkel tried and failed to set up at the federal level previous year after the FDP withdrew.
German politics has been marked in recent years by the rise of the far-right AfD party.
Her major policy shifts have reflected the wishes of a changing society - among them phasing out nuclear power after the 2011 Fukushima disaster - and shifted her CDU firmly to the political centre.
Grocery store shooting leaves 2 dead; suspect in custody
Fischer said Thursday he's "sick and heartbroken" that two people were shot to death, and says the tragedy "hit close to home". Video taken by a store owner showed the suspect wandering around the parking lot as bystanders shouted his location to police.
Over the last two weeks, voters in the states of Hesse and Bavaria also punished her party and coalition allies CSU and SPD in two separate regional elections. With surprising candor, she has mentioned over the past few days how hard it is to manage one's own succession after so many years at the helm.
"The time has come to open a new chapter", Merkel, 64, told a Berlin news conference today that, as is typical of her, ran short on sentiment and long on matter-of-fact pronouncements.
Volker Bouffier, lead candidate for the German Christian Democrats (CDU), fills in his ballot paper in Hesse state elections on October 28, 2018 in Giessen, Germany.
SPD chief Andrea Nahles said her centre-left party, Germany's oldest, had failed "to break free from the government" and carve out a clear profile of its own after serving in multiple, compromise-laden "grand coalitions".
Merkel has faced criticism for her handling of the refugee crisis.
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The Dodgers' bullpen, meanwhile, figures to need more than a day off and a move to a warmer climate. Thursday's travel day gives the Red Sox's formidable bullpen a chance to rest and recharge itself.
Increasing numbers of SPD members have been calling for the party to quit government and lick its wounds in opposition, as it is presently polling below AfD nationwide, at 15 percent to the far-right's 16 percent.