People waved their country's flag, cheered and sang in the streets as cars packed streets beeping horns.
The 82-year-old's departure capped a wave of protests demanding the removal of an ageing elite seen by many as out of touch with ordinary people and presiding over an economy riven by cronyism.
Bouteflika's supporters had sought to stop the dissent by telling Algerians not to return to the dark days in the 90s when some 200,000 were killed in civil war, warning even of a scenario like in Syria, embroiled in an eight-year-long conflict.
The protests stand in stark contrast to Algeria's neighbour Libya, where Muammar Gaddafi was toppled in a NATO-backed uprising that took much of 2011 and sent the country into chaos.
Only one person was confirmed to have died during the protests, a man around 60 years old who suffered a heart attack, with most rallies peaceful and with protesters cleaning up the streets before going home.
Bouteflika announced he was standing down in a one-sentence statement carried by state news agency APS, followed by a letter - his primary means of communication since suffering a stroke in 2013 and disappearing from public view.
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