With Nixon facing almost certain removal from office by Congress under the impeachment process because of Watergate, Nixon called in Ford just before noon, Washington time.
A high White House official said Nixon formally gave Ford the word that he is stepping down.
The White House said Nixon would go on nationwide radio and television at 9 p.m. EDT Thursday. In the speech, he will tell the American people and the world of his decision to become the first president to quit office before his term expired, the official said.
House Democratic Leader Thomas P. O'Neill said he had learned that Nixon would announce he is prepared to hand his letter of resignation to Secretary of State Henry A. Kissinger as provided by law.
After conferring with Nixon for 70 minutes, Ford called Kissinger and they talked for 10 minutes, according to a Kissinger aide. They arranged to meet in Ford's office next to the White House at mid-afternoon. Ford canceled a scheduled trip to the West, including a stop in Portland, Ore.
Nixon was under extreme pressure from his own party members and friends in Congress to quit following the disclosure Monday that contrary to his past statements, he tried to limit an FBI investigation of Watergate and was told of possible high-level involvement in the scandals as early as June 23, 1972.
Asked how Ford has taken the news, Paul Miltich, the vice president's press secretary, said, "He's remarkably calm and his mood is one of business-like dispatch."
Ford met with top aides and advisers to discuss the inaugural address he will deliver from the East Room late Friday, sources said. He also began working on contingency plans for selecting his vice president and for forming his Cabinet, according to the sources.
Nixon decided to give up his fight for survival after being told that the House was certain to approve articles of impeachment against him, possibly with only a handful of "no" votes, and that he might be able to command about 15 votes in a Senate trial. He would need 34 to avert a two-thirds margin needed for conviction.
Press Secretary Ronald L. Ziegler, one of the few remaining top aides who had been with Nixon since he first took office Jan. 20, 1969, announced to a crowd of reporters after the Nixon-Ford meeting that the President would be going on television.
The effective time of the resignation was left uncertain. Indications were that it might be effective at the time Ford takes the oath as 38th president.
Sen. Edward W. Brooke, R-Mass., introduced a resolution in the Senate urging that federal, state or local prosecutors refrain from prosecuting Nixon for Watergate wrongdoing, but said he would not vote for it himself "if the President says tonight 'I am not guilty' and goes about the country afterward saying, 'I have been martyred, I have been hounded out of office.'"
Crowds of curious, silent passersby peered through the black iron fence surrounding the White House, awaiting the final climactic word or Nixon's fate. Aides said the White House switchboard had been jammed for nearly two days with telephone calls about the resignation rumors that have swept Washington and the world.
On Wall Street, the stock market opened Thursday with another leap upward in anticipation of a Nixon resignation, after the Dow Jones industrial average posted a 23.78-point gain Wednesday, the third largest of the year. Speculation over Nixon's departure saw the U.S. dollar rise and the price of gold decline on European money markets.
Ford began the day Thursday by assuming traditional presidential duty of awarding posthumous Medals of Honor to the families of seven U.S. military men slain in Southeast Asia.
At Nixon's request, he left the ceremony at Blair House and crossed Pennsylvania Avenue to see Nixon.
The entire Nixon family, including the President's daughters, Julie and Tricia and their husbands, waited at the White House.
One aide said Mrs. Nixon and her daughters, especially Julie, were adamant in urging Nixon to remain in office and fight impeachment in the House and Senate.
Ford, who stood on the brink of becoming the 38th president of the United States when the day began, refused all comment to reporters after the awards ceremony which Defense Secretary James Schlesinger also attended.
Asked if he would serve in a Ford administration, Schlesinger replied curtly: "That is a decision which Mr. Ford would have to make."
There were widespread reports-not denied by Ford's aides-that the vice president began making transition plans Monday night, the same day Nixon released three previously withheld tapes disclosing he had approved and taken part in the Watergate cover-up as early as June 23, 1972, within a week of the break-in at Democratic national headquarters.
Former Defense Secretary Melvin R. Laird, a close and influential political associate of Ford's, has urged that he nominate former Gov. Nelson A. Rockefeller of New York as his vice president. There were unconfirmed reports that Rockefeller had been sounded out and had indicated he is willing to accept.
It would be the first time in history that the United States had both a president and a vice president who were not elected.
Brook's "sense of the Senate" resolution, which would have no binding effect on the Justice Department or Watergate special prosecutor Leon Jaworski, was immediately opposed by Democratic leaders.
"I don't want the President to feel that he was driven out of office," said Senate Democratic Leader Mike Mansfield. Mansfield reflected an apparent consensus of fellow Democrats that any congressional granting of immunity-which would be of dubious constitutional value anyway-would be viewed as pressure on Nixon to resign.
As for impeachment proceedings in Congress, scheduled to begin Aug. 19 on the House floor, Speaker Carl Albert said he opposed going any further if Nixon resigns. He and other House leaders implicitly rejected a suggestion by Mansfield that impeachment proceedings should continue, including a Senate trial, to "lay it all out and get away from the idea that the President was being force out."
Sen. Barry M. Goldwater of Arizona, the Senate's most highly respected Republican conservative who saw Nixon Wednesday, said the President could not count on more than 15 Senate votes-far short of the 34 needed to escape conviction and removal from office.
Ford originally had been scheduled to leave Washington at noon for a Republican fund-raising telethon in Los Angeles Thursday night.
GOP National Chairman George Bush postponed the event indefinitely because "the fast-changing situation in Washington has made it uncertain that party leaders could come to Los Angeles to appear on the program."