Dr Tsai Ing-wen became the only candidate for the top post in Taiwan's main opposition DPP after the other two dropped out.
The surprise announcement is likely to have a great impact on the 2016 presidential election.
The current chairman of the Democratic Progressive Party, Su Tseng-chang, said on his Facebook page yesterday that he would not seek re-election in May - news that came as a relief to his beleaguered party, long troubled by factional infighting and indecision about its cross-strait policy.
But it came as a big shock to the ruling Kuomintang, which had hoped the internal troubles within the pro-independence DPP would boost its chances in year-end local government and council elections, as well as the 2016 presidential poll.
Calling for unity in order to win November's elections, the 66-year-old Su said: "Since two former party leaders have declared that they would run for the chairmanship, I have decided after careful consideration not to seek re-election."
The two ex-party leaders he referred to were 57-year-old Tsai, who was DPP chairwoman between 2008 and 2012, and former premier Frank Hsieh Chang-ting, 67, party leader between 2000 and 2002.
Hours later, Hsieh said he was also pulling out.
Tsai, who had been the favourite to win the contest, praised the decisions by Su and Hsieh.
Analysts said that with the withdrawal of Su and Hsieh, Tsai was likely to be elected party leader, which would give her a ticket to run for president.
Tsai lost to KMT leader Ma Ying-jeou when she ran for president in 2008. Pundits and the media said the decisive factor was the DPP's anti-mainland policy. In reviewing her defeat, Tsai admitted the DPP needed to modify its cross-strait policy in order to attract neutral voters who opted for stability instead of the tensions stoked by former president Chen Shui-bian.
But analysts say that Hsieh's all-out advocacy of a more open cross-strait policy, at the expense of the party's traditional pro-independence platform, had not gone down well with DPP members and supporters.
Wang Kung-yi, a professor of international affairs and strategic studies at Tamkang University in Taipei, said a united DPP under Tsai would pose a serious threat to the KMT in both the 2014 and 2016 elections.
"The withdrawals by both Su and Hsieh will definitely disrupt the KMT's deployments in these polls," Wang said.
Across the strait, Li Fei, deputy director of Xiamen University's Taiwan Research Institute, said Tsai was more flexible in terms of formulating cross-strait policy.
"It is necessary for the DPP to make clear its stance on cross-strait ties. It needs to assure Taiwanese voters that cross-strait ties will not be in a crisis if she becomes the next president."
Additional reporting by Teddy Ng