Mr Mugabe wrote in a letter which was read out in parliament: "My decision to resign is voluntary on my part and arises from my concern for the welfare of the people of Zimbabwe and my desire for a smooth, non-violent transfer of power."
Mugabe was in power for 37 years.
Most Rev Chad Gandiya told Premier the resignation is "history in the making" and there is a huge sense of relief.
He said: "Since independence we've known no other. There's great jubilation in town as I speak.
"There are great expectations from the general population.
"God has given us a chance and we must use it profitably for all the people of Zimbabwe and not just for a few people."
Bishop Chad added that he was happy that issue was resolved peacefully, and hopes the peace continues as the country looks forward to new leadership.
He told Premier: "We need to embrace change and move forward without vengeance.
"You'll have those who want vengeance, that's not the Christian way. We need to be forgiving, we need to move forward and build our country together.
"It's up to those that are coming in as our leader to either ride on the wave of this excitement and do great things or destroy it for themselves."
Mr Mugabe, who had been the world's oldest head of state at 93, said that proper procedures should be followed to install new leadership.
Listen to Most Rev Chad Gandiya speaking with Premier's Tola Mbakwe here: