Nancy Pelosi, a giant of American politics and the first woman to lead the House of Representatives, is stepping down from leadership to make way for a new generation, she said on Thursday.

The 82-year-old, an ally of Joe Biden who led congressional Democrats for two decades, made the announcement after Republicans regained a majority in the chamber.

“With great confidence in our caucus, I will not seek re-election to Democratic leadership in the next Congress,” Pelosi said in a speech on the House floor. “For me, the hour’s come for a new generation to lead the Democratic caucus that I so deeply respect, and I’m grateful that so many are ready and willing to shoulder this awesome responsibility.”

The outgoing speaker, wearing a Mace of the Republic brooch and a white suit that nodded to the suffragist movement, was greeted with a standing ovation. In an emotional scene House Democrats gathered around her, some tearful and many embracing her or planting kisses on her cheek.

Biden led tributes to Pelosi’s career. In a statement released by the White House, the president described her as “the most consequential speaker of the House of Representatives in our history.

“There are countless examples of how she embodies the obligation of elected officials to uphold their oath to God and country to ensure our democracy delivers and remains a beacon to the world. In everything she does, she reflects a dignity in her actions and a dignity she sees in the lives of the people of this nation.”

Pelosi, a congresswoman from California, was the highest-ranking and most powerful elected woman in American history until Kamala Harris became vice-president in January last year.

A devout Catholic, she grew up in Baltimore, the daughter of Thomas D’Alesandro Jr, a Democratic mayor and former congressman. By the age of 30, she was the mother of five children. “When I first came to the floor at six years old, never would I have thought that someday I would go from homemaker to House speaker,” she reflected on Thursday.

Pelosi was first elected to the House in a special election and steadily moved up the ranks. She broke a glass ceiling in 2007 when she was elected the first woman to serve as speaker – a position second in line to the presidency – and steered then president Barack Obama’s signature healthcare law through the House.

Regaining the position in 2019, she earned plaudits for her no-nonsense approach to then president Donald Trump. She memorably ripped up a copy of his speech just as he finished his third State of the Union address. She was the first speaker in history to oversee two House votes to impeach a president.

In her remarks, Pelosi, who will remain in Congress, said she had enjoyed working with three presidents (George Bush, Obama and Biden), making no mention of Trump. She welcomed last week’s midterm elections, in which numerous election deniers loyal to Trump were defeated.

“With these elections, the people stood in the breach and repelled the assault on democracy. They resoundingly rejected violence and insurrection and, in doing so, gave proof through the night that our flag was still there” – a reference to the national anthem, The Star-Spangled Banner.

In recent days Pelosi had said the 28 October assault on her husband, Paul, by a hammer-wielding intruder in their San Francisco home, and other factors, would affect her decision on whether to continue.

David Axelrod, a former chief strategist for Obama, tweeted: “People will honor Speaker Pelosi as the first woman to hold that post. But history will remember her as one of the most skillful, durable and accomplished legislative leaders in American history. A truly towering figure. One of a kind.”

Along with Biden, who turns 80 on Sunday, Democrats’ ageing leadership has raised questions about the party’s next generation.

Her retirement sets up a leadership battle among contenders including the caucus chair, Hakeem Jeffries, 52, from New York. House Democrats are set to vote on their leaders on 30 November.

On Wednesday, House Republicans offered initial support for Kevin McCarthy to serve as speaker when the next Congress convenes. McCarthy, also from California, currently serves as House Republican leader and will face election by the entire House at the start of the new year. It is not yet clear if he will gain enough backing from fellow Republicans to win the speakership.

Republicans’ majority in the House will be much smaller than polls had predicted, a headache for whoever wins the speakership. Each member will have huge sway over what happens in the chamber, paving the way for potentially chaotic battles over government funding and other measures. Many are aligned with Trump.

But control of House committees will give Republicans the ability to blunt Biden’s legislative agenda, as well as to launch potentially politically damaging investigations of his administration and family.

On Thursday, Jim Jordan of Ohio and James Comer of Kentucky, the top Republicans on the House judiciary and oversight committees, signalled their intent by announcing an investigation to determine the extent of Biden’s involvement in his son Hunter’s business dealings.

“We want to know what the Biden administration is trying to hide from the American people,” Comer said at a press conference, alleging that the Bidens “flourished and became millionaires by simply offering access to the family”.

Joe Biden has repeatedly denied any wrongdoing. In 2020 the Politifact website concluded that there is no evidence that Hunter Biden came close to breaking the law, much less any evidence that his father has done so.

Kyle Herrig, executive director of the Congressional Integrity Project watchdog, said: “Instead of addressing the issues that affect the American people the most, they are acting like Donald Trump and pushing their radical Maga [Make America Great Again] Republican agenda. They haven’t learned their lesson.”

The Democratic National Committee said in a statement: “The new Republican House majority features election deniers, conspiracy theorists, and Maga extremists. Whatever Republican wins the speaker race will be completely beholden to extreme Maga Republicans and you can count on House Republicans to remind Americans every day just how extreme their party is.”

Any legislation that emerges from the House could face steep odds in the Senate, where Democrats won a slim majority on Saturday. Both parties are looking to a 6 December Senate runoff in Georgia to strengthen their hand.