He will be the first head of the Roman Catholic Church to resign in almost 600 years, with his departure expected to leave the post vacant for around three weeks.
The 85-year-old German’s resignation letter said: “After having repeatedly examined my conscience before God, I have come to the certainty that my strengths, due to an advanced age, are no longer suited to an adequate exercise of the Petrine ministry.
“I am well aware that this ministry, due to its essential spiritual nature, must be carried out not only with words and deeds, but no less with prayer and suffering.
“However, in today’s world, subject to so many rapid changes and shaken by questions of deep relevance for the life of faith, in order to govern the bark of Saint Peter and proclaim the Gospel, both strength of mind and body are necessary, strength which in the last few months, has deteriorated in me to the extent that I have had to recognise my incapacity to adequately fulfil the ministry entrusted to me.”
He will step down after almost eight years in the post, having been elected in April 2005.
Speaking at a hastily-arranged news conference, Vatican spokesman Federico Lombardi said: “The pope caught us a bit by surprise.
“We should have a new pope for Easter.”
He told reporters a conclave could be held within 15 or 20 days of the resignation – and insisted Pope Benedict XVI was not stepping down because of any difficulties in the papacy.
The Vatican has been keen to stress that the pope is not ill and while Mr Lombardi said his vigour had “sadly diminished in recent times”, he praised the pontiff’s “humility and great honour”.
Pope Benedict will head to his Castel Gandolfo residence outside Rome following his resignation, then back to Rome to live in a monastery of cloistered nuns on the Vatican hills.
The pope’s brother, Georg Ratzinger, said the pontiff had been advised by his doctor not to take transatlantic trips for health reasons – and that he had been considering resigning for months.
He said his brother was having increasing difficulty walking and that his resignation was part of a “natural process.”