The 71-year-old, who is regarded as the most successful manager in English soccer, broke the news about his intentions to retire through a statement in The Guardian.
"The decision to retire is one that I have thought a great deal about and one that I have not taken lightly. It is the right time. It was important to me to leave an organisation in the strongest possible shape and I believe I have done so. The quality of this league winning squad, and the balance of ages within it, bodes well for continued success at the highest level whilst the structure of the youth set-up will ensure that the long- term future of the club remains a bright one," he wrote.
According to Yahoo! News, Everton manager David Moyes is the current favorite to replace Ferguson. Real Madid manager Jose Mourinho has also been rumored as a candidate for the job.
While working with Manchester United Ferguson has won 13 league titles, two Champions Leagues, the Cup Winners' Cup, five FA Cups and four League Cups.
To read Ferguson's complete statement visit The Guardian.
Notable deaths of 2014 [PHOTOS]
Soviets call Reagan joke 'dangerous' [ARCHIVE]