"I will leave that door open."
He previously offered to resign after his bike ride and trip to the beach during lockdown.
Ardern said they couldn't afford to lose a "key player" when he offered his resignation during the lockdown but now it was clear the response to Covid-19 was the priority and Clark in the role was a distraction.
Ardern and Clark's 'frank' conversation
They had a "very frank" discussion in person late last week about "some issues" that were getting in the way.
On Wednesday evening a video went viral of Clark telling media that director general of health Ashley Bloomfield had accepted responsibility for the fact almost all of the 55 people who left managed isolation under compassionate grounds had not been tested for Covid-19 before leaving.
It was not the first time Clark had said this, but was the first time it'd been caught on camera in front of an apparently dejected Bloomfield.
It caused an outrage online, with many calling for Clark's resignation and others fundraising to buy Bloomfield flowers.
Ardern said today New Zealand couldn't afford to have any distractions.
"We need as a country, as a Government, as a Cabinet, to be completely focused on our Covid response."
Ardern said the ongoing response needed "really clear leadership" and Clark felt he couldn't do that.
"We had a discussion around what we needed to do to keep Covid as a priority. It was his view that he needed to go.
"While Minister Clark made this decision it is one that I agree with."
Ardern said ultimately it was Clark's call and his judgment.
She said Clark was putting the team before himself and thanked him for his work in the role.
Chris Hipkins steps up
Chris Hipkins, who is Minister of Education, State Services and the Leader of the House, is standing in as Health Minister until the election, when it will be re-assessed if Labour is re-elected.
Hipkins said he would be "giving it my all" until the election and will sit down with the health team and work through the response to Covid-19.
As well there were "pressing challenges" in the portfolio, like Heather Simpson's review of health and disability services and capital investments that "require constant supervision and nurturing".
He said he had a very good working relationship with Bloomfield but they hadn't spoken this morning as they had been "playing a bit of phone tag".
Hipkins said he felt Bloomfield had "thoroughly earned" his holiday next week and hoped he'd still take it, despite the change in ministers.
Hipkins doesn't have any experience in the health sector but said "I enjoy a good challenge" when asked if it was a portfolio he'd been eyeing.
Clark said it had been an "extraordinary privilege" and he had given it "my all".
READ MORE:
• 'Unhelpful distraction': Health Minister David Clark resigns
• Health Minister David Clark stands by his comments, criticising Health boss Ashley Bloomfield
• Health Minister David Clark throws Dr Ashley Bloomfield under the bus - as he stands right behind him
• Health Minister David Clark's Wikipedia entry edited following controversy with Dr Ashley Bloomfield
He said he looked forward to having more time to serve his electorate of Dunedin North, and he intended to stand in the seat again in September.
which Ardern would have accepted were it not for the Covid-19.
With no community transmission and the focus now on the border measures, "it is appropriate for me to move on".
He thanked the frontline health workers and all Kiwis who made sacrifices to put New Zealand in a position to be the envy of the world.
"Now is the right time to hand over the reins."
Ardern said this morning that "David Clark contacted me yesterday to confirm his wish to resign as a minister and I accepted that resignation".
"It's essential our health leadership has the confidence of the New Zealand public. As David has said to me the needs of the team must come before him as an individual."
Clark under pressure
Clark had been under increasing pressure to step down, but he had been repeatedly backed by Prime Minister Jacinda Ardern, even though she said she would have sacked him over his lockdown breaches if she didn't need continuity in the health response to Covid-19.
Clark was demoted after driving his family 20km to a beach to go for a walk in the first weekend of the lockdown.
He had also gone mountain biking during the lockdown, though that was not as clear a breach of the rules as driving to the beach.
"At a time when we are asking New Zealanders to make historic sacrifices I've let the team down. I've been an idiot," Clark said of his beach excursion.
He also came under intense pressure over the bungles at the border in recent weeks, and was the subject of public criticism over video footage that went viral as he seemed to throw director general of health Ashley Bloomfield under the bus as Bloomfield was standing behind him.