Piebalgs, a former European Commissioner, said that he had not been able to bring about radical changes needed in the party. He named his deputy Edvards Smiltēns as a potential successor.
Last June Piebalgs replaced Solvita Aboltina as party leader.
Ever since the resignation of Prime Minister Laimdota Straujuma in late 2015, Unity has been anything but unified. Its dithering over naming a candidate to succeed Straujuma saw Maris Kucinskis of the Green and Farmers Union become prime minister instead and the party's poll ratings have plummeted.
Yet just a year before, Unity was riding high after successfully helping to oversee Latvia's six-month presidency of the European Union.
While TV3 commercial television on July 10 reported that the so-called liberal wing of the party, comprised of MPs Ilze Viņķele, Lolita Čigāne and four others, could split off from Unity and create a party of their own.
In order to be eligible to partake in the next parliamentary election, scheduled for fall 2018, they would have to register the new party by this September.
Unity currently holds 23 seats at the 100-seat Latvian parliament.