Guardiola's decision to quit and recharge his batteries ends a remarkable trophy-laden four-year spell built on a passing style of unmatched fluidity and control.
"I'm sorry for the confusion in recent weeks. I've always wanted short contracts because the demands at Barcelona are so big," the 41-year-old told a news conference at the Nou Camp with players present in the audience.
"Now we were out of the two main competitions, it was a good time to announce it.
"The reason is simple. Four years, that gets everyone tired. The new coach will give things that I can't give anymore."
Speculation about Guardiola's future intensified after holders Barca were knocked out of the Champions League by Chelsea 3-2 on aggregate in their memorable semi-final on Tuesday when world player of the year Lionel Messi missed a penalty.
That followed a 2-1 home loss to arch rivals Real Madrid on Saturday that meant they are likely to miss out on a fourth straight La Liga title.
A drained Guardiola added: "I am really sorry about having lost that energy but I cannot lie to myself if I don't have the same energy and excitement as the beginning and I knew from before it was my last season."
The Nou Camp hierarchy have moved quickly to name a successor and have continued in the mould of Guardiola, who was previously their B team coach.
"We chose Tito because he represents the idea and the image," sporting director Andoni Zubizarreta said. "He has commitment and personality."
Guardiola has enjoyed a hugely successful stint at the helm of the Catalan club, winning 13 trophies in four seasons while playing a style of football that has been widely acclaimed as the best in the world.
However, the longer he delayed a decision on his future the more speculation grew he might quit and even be lured to another club, with reports linking him to the Chelsea and Inter Milan jobs among others.
Some suggested he was in line to become the next England manager but he implied at the news conference that he was planning to take a sabbatical.
He has preferred to renew his Barca contract on an annual basis and waited until February 8 last year before agreeing a new deal.
He then went on to capture a third consecutive La Liga title and a second Champions League crown, as well as the Spanish and European Super Cups and the Club World Cup. Their success was built on ball retention with teams fortunate to enjoy 30 percent of possession against them.
Barca have a chance to claim more silverware this season in the Copa del Rey and play Athletic Bilbao in next month's final.