Mr Castro told Cubans he was retiring in a letter in Granma
Cubans inside and outside Cuba have been reacting to the announcement by their long-serving, ailing leader Fidel Castro that he will retire as president.
Here Cubans on the island and in exile give their verdict on Mr Castro's retirement and predict what is next for their country.
ARNALDO CORO ANTICH, HAVANA, CUBA
Cubans have been expecting to hear an announcement like this for some time.
Fidel is intelligent and wise and he knew what was happening with his health.
He knew that it would eventually impact on his ability to continue as president.
Now he will continue to consult and advise the new leadership which meets in the new parliament on Sunday.
I expect Raul Castro to be selected as the next president then.
We also have three generations of Cubans in this country, all with leaders that are capable of forming part of a new government.
For example Carlos Lage Davila, the vice-president of the council of ministers, has already shown he is capable of handling the day to day affairs of government, particularly the economy.
So overall things remain as normal here. Fidel prepared his people well for this day.
MARIA CARDOVA, CUBAN EXILE IN BRUSSELS, BELGIUM
This is a very emotional day.
The announcement of Fidel's retirement is very good news for exiles like me who have a yearning to go back to Cuba.
I have not been back since 1961, when my family was forced to leave.
The news was greeted with joy by many in the Cuban diaspora
This is not, however, the end of Fidel and his influence. He has such a strong personality and image that has been so ingrained in Cuban society for the past 47 years that it will not just disappear overnight.
Raul will take over but he does not have the power or the charisma of Fidel, so they may have to allow some of the younger generation of politicians to come through.
It's all speculation for now until we know what Fidel is really thinking.
There's no way he'll let go entirely of power, so I suspect not much will change for now.
It is, though, a significant step towards where we as exiles would like to see Cuba - a democracy with freedom of speech and liberty.
But it will not be fully achieved - and I will not be able to return - until he dies.
ROLANDO MENDEZ, CUBAN EXILE IN SPAIN
We haven't seen the Cuban dictator in the flesh since he withdrew through illness. This leads me to think that he may have died already.
However, to maintain control and keep the peace, his successors have chosen to prolong his life to buy themselves time and strengthen their own positions.
The announcement of his resignation is just a step towards the news of his death, which will surely come soon.
Life in Cuba is completely controlled by the repressive organs of government.
If perhaps news of Castro's death had spread a few months ago, there might have been demonstrations which could have toppled the government.
Meanwhile, the public image of the dictator as leader of the masses continues to be manipulated through his supposed writings under his name, published in the official paper Granma, organ of the only legal political party on the island.
The only one who can take over power now is Raul. None of the others have popular appeal nor the backing of those within government circles.
ELOY DANIEL ALVAREZ GUERRA, SANTIAGO DE CUBA, CUBA
I don't think much is going to change as a result of Fidel's resignation. He is still the leader of the revolution.
A lot of people in Cuba still think of Fidel as the leader. He has a strong personality and the wisdom to make decisions.
Cubans have a different view of older people than in the West. We think old people have wisdom and experience and young people don't.
So we think Fidel and his brother Raul are appropriate leaders, because they have led for 50 years. There are younger people in government but they are technical workers and administrators.
People who have the experience - like Fidel and Raul - are really in control. The young ones implement economic and political changes that these leaders want.
I don't think most people are unhappy with this, whether they are workers in factories or professionals, like teachers or doctors.
Cubans are happy people - we don't think moving one person and replacing him with another is important.
Yes, the decision about who the president of the council of state and the council of government is made by people who are supposed to be representatives of the people, but as far as Fidel is concerned, he led the revolution, he is a charismatic leader and a historical figure.
You can't change this. People do think that Raul will bring some changes that are needed, but those changes are enough.
Fidel has demonstrated that he can lead. The difference is that nobody knows the younger ones in government. We have to wait and see what they can do.
Perhaps Fidel will take up a different kind of position now, such as member of the council.