Gordon Strachan will end his tenure as Southampton manager in the summer to undergo a hip operation.
Saints announced in a statement that Strachan had decided not to extend his contract beyond the end of the season.
The club said the 46-year-old Scot's decision had been for "medical and other personal reasons" and was not due to any rift with chairman Rupert Lowe.
"Gordon and I have fully discussed the situation and are comfortable with his decision," said Lowe.
Strachan stressed that he made the decision to have the operation after consulting his family two years ago.
"It is not a football thing or about money or about the club," he said.
"I made the decision with my family a few weeks after I took the job that I would see out my contract and then walk away.
"I am not going anywhere else and I am not cracking up so people can stop looking too deeply into it.
"This is probably the least stressful time of my seven years in management. The only thing wrong with my health is my hip which needs replacing.
"The chairman asked me to sign a new contract in the summer and he asked me again several times during the last five months.
"I told him in October I would not be signing. He asked me several times to reconsider and he has been absolutely fantastic.
"We hoped to keep it quiet until the end of the season but it was leaking out so we have been forced to say something."
Lowe paid tribute to the former Scotland international midfielder for the job he had done.
"Despite the fact that we may appear an unlikely partnership, I have very much enjoyed working with Gordon over the past two-and-a-half years," he added.
"His enthusiasm and commitment have inspired everybody and the club has moved forward during a crucial period after leaving The Dell and moving to the Friends Provident St Mary's Stadium.
"Gordon has assured me that he will give 110% for the balance of this season in order to capitalise on our current position in the league.
"Our fans will be sad to see a man, whose passion matched theirs, taking time out of the game."
Strachan will take charge of the Southampton side as normal for the Premiership trip to Birmingham on Saturday.
He joined the club 27 months ago, six weeks after he was sacked by Coventry following their relegation and a poor start in Division One.
He led them to the FA Cup final last season, when they lost against Arsenal, but they made an early exit from the Uefa Cup when they lost to Steaua Bucharest.
Strachan's side have suffered a dip in form recently, going out of the Carling Cup at Bolton and losing 3-0 at home to Newcastle in the FA Cup third round.
The Scot had been strongly linked with the vacancy at Leeds United this season and had been touted as a potential contender for Tottenham.
But Saints said he had decided to take "a break from the demands and pressures that are associated with being a Premier League football manager", and would continue to live in the Southampton area.