The Vanua'aku Pati's presidency will now be taken up by MP Bob Loughman, who like Mr Natuman is from Tanna.
Natuman recently lost his seat in parliament due to his conviction for perverting the course of justice, for which he was given a two-year suspended sentence.
He has not ruled out standing for parliament again in the next election in 2020.
However, Natuman decided not to contest the second round of the party presidential election at the Vanua'aku Pati's congress yesterday.
The Daily Post newspaper reports that Natuman's move was in the interests of the party's unity.
Loughman's appointment as president is the first time in over a decade that the party ended its national congress with new leadership without any split in its ranks.
Natuman has assured the new party executive that he will work closely with his successor to give all assistance possible.