His haul includes 13 titles, two Champions League crowns, five FA Cups and four League Cups.
"The decision to retire is one that I have thought a great deal about. It is the right time," Ferguson said. "It was important to me to leave an organisation in the strongest possible shape and I believe I have done so. "The quality of this league winning squad, and the balance of ages within it, bodes well for continued success at the highest level whilst the structure of the youth set-up will ensure that the long-term future of the club remains a bright one.
Ferguson, who will take on the dual role of director and ambassador for United, praised the people he felt helped him build the club into one of the biggest in the world.
"I must pay tribute to my family, their love and support has been essential," he added."My wife Cathy has been the key figure throughout my career, providing a bedrock of both stability and encouragement. Words are not enough to express what this has meant to me.
"As for my players and staff, past and present, I would like to thank them all for a staggering level of professional conduct and dedication that has helped to deliver so many memorable triumphs. Without their contribution the history of this great club would not be as rich."
Already Bookmakers have made Everton manager David Moyes odds-on favourite to take over at Old Trafford.
The Scot is out of contract in the summer at Goodison Park having delayed talks on a new deal until the end of the season.
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