The Speaker of the House made the big announcement Thursday at the Capitol, in the wake of Democrats losing control of the House to Republicans in the midterm elections.

Nancy says instead of serving as House Minority Leader, she will serve as a member of the House representing San Francisco ... explaining it's time for the party to move boldly into the future with a new generation of leaders.

Pelosi, the first woman to ever lead a party in Congress, was swarmed by her colleagues after her speech ... sharing hugs and shaking hands on the House floor, and getting emotional.

First elected to the House in 1987, Nancy rose to become the first woman to serve as Speaker of the House ... and she says she's proud to see more women and minorities among the House ranks, increasing from only a dozen when she started to nearly 100 now.

During her speech, Nancy mentioned landmark legislation accomplished with former presidents George W. Bush, Barack Obama and Joe Biden ... while snubbing Donald Trump, who she staunchly opposed when she was the House Minority Leader during the Trump administration.

Nancy, who grew up in Baltimore as the daughter of a politician, started her speech by recalling the first time she laid eyes on the Capitol when she was 6 years old ... cementing how she knew politics would be her future.

Pelosi was previously reelected to serve as House Speaker in January 2021, only three days before the January 6 riots.

As we previously reported ... CNN obtained video shot inside the Capitol on January 6, as Pelosi's Chief of Staff tells her Trump won't show face to turn back the angry mob because Secret Service didn't have the resources to protect him.

Nancy wasn't having it, angrily declaring she was ready to throw hands with Trump and saying ... "I'm gonna punch him out, and I'm gonna go to jail and I'm gonna be happy."