The decision of Omid Nouripour and Ricarda Lang comes at a time of turbulence for the coalition, buffeted by voter angst over the economic challenges facing Germany and by fierce debates over migration as a national election looms next year.
While their move has no direct impact on the government or on Greens ministers serving in it - including Scholz's deputy Robert Habeck and Foreign Minister Annalena Baerbock - analysts said it could stoke greater political instability.
"The result in Brandenburg (regional election) on Sunday is a sign our party is in its deepest crisis for a decade," Nouripour told a news conference. "It is time to lay our beloved party's fate in others' hands."
The Greens failed to clear the 5% hurdle needed to enter parliament in Brandenburg and also that of Thuringia on Sept. 1.
Habeck, who is Germany's economy minister, said he shared responsibility for the poor election results and called for an open debate on the Greens' future at their party congress in mid-November, when a new leadership will be elected.
"The Greens will reorder their ranks to start the catch-up ahead of the elections with new force," Habeck said.
A new left-wing populist party and the far-right Alternative for Germany (AfD) have outperformed all three coalition parties this year, while the main opposition conservatives lead in national polls.
All three coalition partners also suffered big losses in their vote share in the Saxony regional election on Sept. 1 and for the European Parliament earlier this year.
ECONOMIC WOES
Troubles have been piling up for the German economy since Scholz's Social Democrats (SPD) forged a three-way coalition with the Greens and pro-business Free Democrats in 2021.
Unemployment is ticking up as the export-focused industries that drive Europe's largest economy struggle with high energy and labour costs and increased competition from China and the United States, including a shift to electric vehicles that has challenged Volkswagen, the continent's largest carmaker.
Decades of underinvestment in crucial infrastructure are also taking a heavy toll, causing unreliable train services, a collapsed bridge in Dresden and other woes that have fed a growing sense among voters that Germany is falling behind.
"The coalition is cracking up live on camera," said Thorsten Frei, floor leader of the opposition conservatives. "Bold decisions are needed. People expect answers on the escalating economic crisis. And they want a U-turn in migration policy."
Some in Scholz's party are asking if he should stand aside in favour of a more popular candidate for next year's election, while speculation about whether the Free Democrats might quit the coalition continues unabated.
"This (move by the Greens' co-leaders) makes the coalition even more unstable," said Stefan Marshall, political scientist at the University of Duesseldorf, adding that Scholz might face even greater governance challenges if he has to make concessions to keep a new, more radical Greens leadership on board.
The parliamentary leader of Scholz's centre-left SPD, Katja Mast, said she believed the Greens would want to stay in the governing coalition.
Government pledges to crack down on irregular migration following a deadly knife attack by an immigrant in the city of Solingen appear to have further bolstered the AfD, for whom the topic is their core message.
The Greens need to adapt to a dramatically changed political climate, outgoing co-leader Lang said at Wednesday's news conference.
"Next year's election is not just any election," she said. "(It will be a choice between) a country focussed on achieving prosperity by sticking to climate neutrality or a country run by people who want to back away from all that."
