NEW YORK - Joe Lhota is stepping down as chairman of the Metropolitan Transportation Authority.

Sources say he submitted his letter of resignation Thursday.

The move comes as the MTA makes preparations for the looming L train shutdown and overhaul of the subway's aging signal system.

Vice Chairman Fernando Ferrer will take over as acting chairman. Ferrer says he is optimistic about the MTA's future.

"I know the terrain, we have a good board, we have phenomenal upper management, and even more important, the men and women who work in the MTA, whether it's in subways or buses, whether it's in commuter rails or on bridges and tunnels, anywhere they work, they're committed to this mission, as committed as we are," he said.

Mayor Bill de Blasio was asked about Lhota's resignation on WNYC radio Friday morning.

"The bottom line here is, there are clearly a lot of other leaders who can carry forward the work. But no one is going to be able to get the work done in fixing our subways if we don't have a permanent funding source. Freddy Ferrer is a very good public servant. He will have the ability to keep the MTA moving forward," de Blasio said.

Governor Andrew Cuomo appointed Lhota for his second stint as MTA head in June of 2017. In a tweet, he thanked him for his service.

Lhota first served as MTA chair for a brief stint in 2012, when he helped get service back on track after Hurricane Sandy.

He then ran against Bill de Blasio for mayor in 2013, but was defeated.

During his second tenure, he oversaw an $840 million Subway Action Plan of quick fixes to halt an avalance of breakdowns and delays. 

The system is now showing glimmers of improvement. Last month, on-time performance hit a more than three-year high.

Lhota also overhauled leadership across the MTA, recruiting Andy Byford to run the subway and the buses, and installing new presidents of the MTA's commuter railroads.

His return was not without controversy, though. Lhota never gave up his job at NYU Langone Health and served on the board of Madison Square Garden, which sits atop Penn Station, raising questions about potential conflicts of interest.

Just last month, Lhota told reporters he would serve until his term ends in 2021. But Friday, he said he achieved what he set out to do.

"I volunteered to become MTA chairman with the sole purpose of halting the decline of service and stabilizing the system," he said in a statement, adding, "The Subway Action Plan was developed in my first month at the MTA and it has successfully arrested the subway's decline."

Sources tell NY1 that candidates to replace Lhota include MTA officials Pat Foye, Ronnie Hakim and Janno Lieber - and longtime Cuomo confidant Larry Schwartz.