The South China Morning Post quoted the U.S. Embassy to report Locke's decision.
Locke, 63, who graduated in political science from Yale University and obtained a law degree from Boston University, has held his ambassadorial job since August 2011. Prior to that, he was U.S. commerce secretary and governor of Washington state.
In a statement, Locke said he had informed President Barack Obama of his decision when the two met earlier this month. He said he informed the president he would "step down as ambassador in early 2014 to rejoin my family in Seattle."
Expressing his gratitude to Obama, he said serving as U.S. Ambassador to China "has been the honor of a lifetime."
"Helping manage one of the most vitally important bilateral relationships for the United States, with so many critical American interests at stake, has been an immense and rewarding challenge," Locke said.
During his China assignment, he said efforts by him and his staff "focused on job creation in America by increasing exports to China, opening more markets for American companies, and promoting Chinese investment in the U.S."
"And we have advanced American values by meeting with religious leaders and human rights lawyers, and visiting Tibetan and Uighur ethnic minorities in Tibet and Xinjiang," he said.
He said U.S.-China relations would continue to grow stronger and expressed confidence "in the ability of our leaders to manage differences and increase cooperation in areas of mutual concern to the benefit of not just our two great peoples, but the entire world."
Locke and his wife have three children together.