"After careful consideration and following discussions with the club, I feel it is the right time for me to step down at the end of the season," Arsene Wenger said in the club's statement.
"I am grateful for having had the privilege to serve the club for so many memorable years," he added.
Arsenal owner Stan Kroenke said it is "one of the most difficult days we have ever had in all our years in sport," according to AP.
Arsene Wenger had one more year left on his contract.
Arsenal stated that it will make an appointment as soon as possible.