Juha Sipila has been the country's prime minister since 2015 after forming a three-party governing coalition with two other right-leaning parties, including the small populist Blue Reform Party, a group that was once part of the eurosceptic True Finns but split up amid divisions over immigration policies.
"Prime Minister Sipila will request his resignation because the health care reform can not be accomplished during this government term", Antti Kaikkonen, the head of Sipila's Centre Party's parliamentary group wrote on Twitter.
The country is scheduled to hold general elections in mid-April and is due to take over the rotating presidency of the European Union in July.
"I take the responsibility for the failure".
When beginning his term as prime minister in 2015, Sipila said he would either "bring results" or resign.
At a later press conference, Sipila said health care had been one of his government's main goals and that he was "hugely disappointed".More news: Third person ever may have been cured of HIV
More news: Aussie Bogut just happy to be along for the ride with Warriors
More news: Kelly Released From Jail After Paying Child Support
Sipila tendered in the resignation letter of his government to President Sauli Niinisto on Friday, March 8.
According to the government, the reform could have curbed the annual growth of Finland's public social and healthcare expenses to 0.9% from the current estimate of 2.4% between 2019 and 2029. Sipila's center-right government resigned Friday after failing to push through a planned social and health reform.
Sipila's decision is also an admission that the government was unable to rally enough support to push its pro-market reforms through parliament.
The latest polls give the Social Democrats about 21 per cent, Mr Sipila's Centre party 14 per cent, and the governing centre-right National Coalition party 17 per cent.
The Centre Party chair said that his coalition partners understood his reasons for proposing the government's resignation.