Baillieu's resignation as leader of the Liberal Party in the state and as premier was a surprise, the Australian Broadcasting Corp. reported. The party called an emergency meeting in the evening when he made the announcement.
"I love this state, I love this party and I love this role that I have had the honor to enjoy over the last two-and-a-bit years," he told reporters. "But it is apparent to me that a change of leadership is in the best interests of the government."
Earlier in the day, a Liberal member of the state Parliament, Geoff Shaw, resigned from the party, putting the Victorian coalition government's majority at risk.
A new poll this week also showed a slide in Liberal support in the past two months, with respondents preferring Labor 53 percent to 47 percent, The Australian reported.
Napthine, who celebrated his birthday Wednesday, praised Baillieu's leadership. But Daniel Andrews, leader of the opposition in Victoria, criticized the leadership change.
"The premiership of the great state of Victoria is not a birthday gift. It ought to be earned and be the choice of the Victorian community, not a handful of Liberal members of Parliament," he said. "Let's hope in the days to follow we'll learn more about why this leadership change has been made."