Debbie Wasserman Schultz announced Sunday she is stepping down as chairwoman of the Democratic National Committee at the end of the party's convention, which is set to begin here Monday.
Her announcement that she was leaving had pro-Sanders supporters cheering during a demonstration in Philadelphia and Donald Trump and other Republicans crowing about the disarray among the Democrats.
Wasserman Schultz talked with both President Barack Obama and Clinton before making her announcement, a Democratic source said.
"Going forward, the best way for me to accomplish those goals [which include electing Clinton president] is to step down as Party Chair at the end of this convention," Wasserman Schultz said in the statement.
"As Party Chair, this week I will open and close the Convention and I will address our delegates about the stakes involved in this election not only for Democrats, but for all Americans," she continued.
Earlier in the day, a Democrat close to the talks told CNN that she would not appear on stage, but Wasserman Schultz and her allies persisted, and she is now expected to appear Monday afternoon. But her schedule still remained subject to change.
Wasserman Schultz had faced intense pressure over the weekend to quit her post, several Democratic leaders told CNN, urging her to quell a growing controversy threatening to disrupt Clinton's nominating convention.
Senate Democratic leader Harry Reid wanted her out even before the leaked DNC emails scandal broke and House Minority Leader Nancy Pelosi wouldn't lift a finger to try and save her House colleague, sources said.
Sanders, who will address the convention Monday night in prime time, issued a statement calling for a new direction for the party that would welcome the working class and young voters -- and remain neutral in future Democratic primary contests.
"Debbie Wasserman Schultz has made the right decision for the future of the Democratic Party," Sanders said.
"While she deserves thanks for her years of service, the party now needs new leadership that will open the doors of the party and welcome in working people and young people," he added. "The party leadership must also always remain impartial in the presidential nominating process, something which did not occur in the 2016 race."
DNC Vice Chair Donna Brazile will serve as interim chair through the election, it was announced Sunday. She had been a CNN political commentator, but CNN and Brazile have mutually agreed to suspend their contract, effective immediately, although she will remain on air during the convention week in an unpaid capacity, CNN said. CNN will revisit the contract once Brazile concludes her role.
Separately, a Democratic operative said Hispanic leaders close to Clinton and her high command were discussing Housing Secretary Julian Castro as a possible successor to Wasserman Schultz at the DNC helm, among a number of other candidates whose name are being mentioned.
Chants of "Debbie is done!" and "Debbie resigned!" broke out at a pro-Sanders rally in Philadelphia after the news was announced.
Party officials decided Saturday that Wasserman Schultz would not have a major speaking role or preside over daily convention proceedings this week. The DNC Rules Committee has named Rep. Marcia Fudge, D-Ohio, as permanent chair of the convention, according to a DNC source. She will gavel each session to order and will gavel each session closed.
"She's been quarantined," another top Democrat said of Wasserman Schultz, following a meeting Saturday night but before her announcement that she was leaving.
Both sides of the aisle react
Earlier Sunday, David Axelrod, a former top adviser to Obama's presidential campaigns and a CNN senior political commentator, said Wasserman Schultz should resign.
"I would ask her to step aside. I would ask her to step aside because she's a distraction in a week that is Hillary Clinton's week," Axelrod told CNN's Jake Tapper on "State of the Union."
After she announced she was out, Axelrod tweeted, "I find this quibbling over whether @DWStweets leaves now or Friday silly. What difference does it make? She's out. She's leaving. Move on!"
Obama issued a statement, saying, "For the last eight years, Chairwoman Debbie Wasserman Schultz has had my back. This afternoon, I called her to let her know that I am grateful."
And Clinton thanked Wasserman Schultz for her leadership of the party.
"I am grateful to Debbie for getting the Democratic Party to this year's historic convention in Philadelphia, and I know that this week's events will be a success thanks to her hard work and leadership," Clinton said.
Trump also weighed in, tweeting and misspelling Wasserman Schultz's name, "Today proves what I have always known, that @Reince Priebus is the tough one and the smart one, not Debbie Wasserman Shultz (@DWStweets.)"
Later, he tweeted, "Crooked Hillary Clinton was not at all loyal to the person in her rigged system that pushed her over the top, DWS. Too bad Bernie flamed out."
Wasserman's Republican counterpart, Reince Priebus, said, "I think the day's events show really the uphill climb Democrats face this week."
"The extreme left will not be satisfied by one person's resignation," the Republican party national chairman added.
Trump campaign chairman Paul Manafort said Clinton should follow Wasserman Schultz out the door.
"Debbie Wasserman Schultz resigned over her failure to secure the DNC's email servers and the rigged system she set up with the Clinton campaign," he said in a statement. "Now Hillary Clinton should follow Wasserman Schultz's lead and drop out over her failure to safeguard top secret, classified information both on her unauthorized home server and while traveling abroad."
DNC hack: What you need to know
Jeff Weaver, Sanders' campaign manager, called Wasserman Schultz's departure a win on CNN's "Erin Burnett OutFront" on Sunday.
"I think what the signal was today is that the voices of Bernie Sanders supporters have been heard," he said. "And other people, frankly, in the party, Hillary Clinton supporters, who felt this was the last straw, that she had to go, and this shows they have been heard and gives us opportunity to move forward toward November -- united to deal with the problem of Donald Trump."
Wasserman Schultz's stewardship of the DNC has been under fire through most of the presidential primary process, but her removal from the convention stage comes following the release of nearly 20,000 emails.
One email appears to show DNC staffers asking how they can reference Sanders' faith to weaken him in the eyes of Southern voters. Another seems to depict an attorney advising the committee on how to defend Clinton against an accusation by the Sanders campaign of not living up to a joint fundraising agreement.
Sanders: No question DNC was supporting Hillary Clinton
wikileaks bernie sanders intv tapper sotu_00005429
Sanders: No question DNC was supporting Hillary Clinton 02:08
Before the announcement, Sanders on Sunday told Tapper the release of the DNC emails that show its staffers working against him underscores the position he's held for months: Wasserman Schultz needs to go.
"I don't think she is qualified to be the chair of the DNC, not only for these awful emails, which revealed the prejudice of the DNC, but also because we need a party that reaches out to working people and young people, and I don't think her leadership style is doing that," Sanders told Tapper on "State of the Union," on the eve of the Democratic National Convention in Philadelphia.
"I am not an atheist," he said. "But aside from all of that, it is an outrage and sad that you would have people in important positions in the DNC trying to undermine my campaign. It goes without saying: The function of the DNC is to represent all of the candidates -- to be fair and even-minded."
He added: "But again, we discussed this many, many months ago, on this show, so what is revealed now is not a shock to me."
'It's gas meets flame'
The publication of the emails comes just a weekend before the start of the Democratic convention, where a major objective for Clinton is to unify the Democratic party by winning over Sanders' voters.
Several Democratic sources told CNN that the leaked DNC emails may inflame tensions between the Clinton and Sanders camps.
"It could threaten their agreement," one Democrat said, referring to the deal reached between Clinton and Sanders about the convention, delegates and the DNC.
The party had agreed to include more progressive principles in its official platform and, as part of the deal, Sanders dropped his fight to contest Wasserman Schultz as the head of the DNC.
"It's gas meets flame," the Democrat said.
The issue surfaced on Saturday at Clinton's first campaign event with Tim Kaine as her running mate, when a protester was escorted out of Florida International University in Miami. The protester shouted "DNC leaks" soon after Clinton thanked Wasserman Schultz for her leadership at the DNC.
The DNC has previously had its files hacked by an individual named "Guccifer 2.0" that may have had ties to the Russians.
Hackers stole opposition research on Trump from the DNC's servers in mid-June. Two separate Russian intelligence-linked cyberattack groups both took place in the DNC's networks.
This story is being updated frequently with new developments and additional information.