The UN has welcomed Libyan Prime Minister Fayez Serraj's decision to step down by the end of October, according to a statement.

"I commend the courageous decision by Fayez Serraj, the president of the Presidency Council of the Government of National Accord (GNA), in announcing his intention to hand over power to a new executive authority by the end of October," Acting Special Representative of the UN Secretary-General to Libya Stephanie Williams said in the statement on Thursday.

"The president's announcement comes at a decisive turning point in Libya's longstanding crisis, when it is clear that the situation is no longer sustainable," Xinhua news agency quoted Williams as saying.

"The onus is now on concerned Libyan parties to fully shoulder their responsibilities before the Libyan people, to take historic decisions, and to accept mutual concessions for the sake of their country," the statement added.

Serraj on Wednesday announced his intention to step down in October and hand over power to a newly appointed government.

He welcomed the recent UN-sponsored consultations between key Libyan stakeholders and expressed hope for more consensus and agreement.

Serraj's UN-backed GNA based in Tripoli was formed in 2015 based on a political agreement that aimed to end the political division in the country.

The GNA had been engaged in a deadly armed conflict against the eastern-based army for more than a year over control of Tripoli, before Serraj's government recently took over all of western Libya.

Libya still remains politically divided amid insecurity and escalating violence..