"As the Secretary of the Interior, Ken has helped usher in a new era of conservation for our nation's land, water, and wildlife," President Obama said in a statement.
The president said Salazar had expanded "responsible development" of U.S. domestic energy resources and made "historic strides" in resolving long-standing disputes with Native American tribes.
Both Obama and Vice President Joe Biden had indicated they wanted Salazar to stay on, but he wanted to spend more time with his family, The Denver Post reported.
Salazar and his wife are the primary caretakers of their 5-year-old autistic granddaughter, who is enrolled in a special school.
Suzanne Roy, director of the American Wild Horse Preservation Campaign, hailed Salazar's departure in a statement, calling his exit "the beginning of the end of the federal government's wild horse and burro roundup program."
The organization has been at odds over the department's roundup and removal of more than 35,000 wild horses from western public lands. The land on which they roamed was leased for livestock grazing.
Only about a third of the wild horses have been adopted, and 50,000 are in government holding facilities, Roy said.