Farage is currently a Member of the European Parliament (MEP) and was re-elected for another four year term as UKIP leader last year.
He said a failure to win his target seat in South Thanet, Kent, would make his role as party leader untenable.
He made the statement in his new book, “Purple Revolution,” which is being serialized in The Telegraph newspaper. He wrote: “The consequences of me failing to secure a seat for myself in the Commons would be significant for both myself and the party.
READ MORE: Farage race row: ‘Brits think Muslims will form fifth column & kill us’
“It is frankly just not credible for me to continue to lead the party without a Westminster seat.”
“What credibility would UKIP have in the Commons if others had to enunciate party policy in parliament and the party leader was only allowed in as a guest?”
“Was I supposed to brief UKIP policy from the Westminster Arms? No – if I fail to win South Thanet, it is curtains for me. I will have to step down.”
The news will be viewed positively in some quarters.
Last week, Farage claimed many British people feel Muslims are an enemy within. He also prompted a race row by pledging to scrap anti-discrimination laws.
During an interview for Channel 4, Farage told former Equality and Human Rights Commissioner Trevor Phillips: “I think perhaps one of the reasons the polls show an increasing level of concern is because people do see a fifth column living within our country, who hate us and want to kill us.”
READ MORE: Farage: ‘If the Green Party won the election, we’d all be living in caves’
Earlier he had accused UKIP's election rivals the Green Party of peddling a regressive brand of politics, saying of the Greens leader: “If Natalie Bennett won the election, we'd all be living in caves.”
“[This politics] is very regressive. There is nothing progressive in terms of the evolution of society or living standards in what these people stand for. The whole thing is based on a fallacy: that our fossil fuels are going to run out and therefore we have to adapt the way we live.”
There are currently two UKIP MPs in parliament. The party won by-elections in Clacton and Rochester and Strood last year after two serving Conservative MPs defected.
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