|Pope Benedict XVI|
The move, announced without warning, will take place on 28 February and leave the papacy vacant until a successor is chosen.
A Vatican spokesman said the pontiff's aides were "incredulous" when he told them he would step down because he was too weak to fulfil his duties. The pope summoned a meeting of cardinals to tell them of "a decision of great importance for the life of the church".
One of those called to hear the announcement, the Mexican prelate Monsignor Dr Oscar Sánchez, said none of the cardinals had expected it. "The pope took a sheet of paper and read from it. He just said that he was resigning and that he would be finishing on February 28," he said.
"The cardinals were just looking at one another. Then the pope got to his feet, gave his benediction and left. It was so simple; the simplest thing imaginable. Extraordinary. Nobody expected it. Then we all left in silence. There was absolute silence … and sadness."
A deeply conservative pontiff, whose tenure has been overshadowed by sexual abuse scandals, Pope Benedict, 85, leaves with a chequered reputation after a papacy that was at times both conservative and divisive.
One of the organisations representing victims of Catholic clergy in Ireland's notorious orphanages and industrial schools said the outgoing pontiff had broken his promise to offer justice for the crimes of priests and other members of religious orders.
John Kelly, co-founder of Irish Survivors of Child Abuse, said: "In our view we were let down in terms of promises of inquiries, reform and most importantly of all the Vatican continuing not to acknowledge that any priest or religious found guilty of child abuse would face the civil authorities and be tried for their crimes in the courts."
The announcement of the resignation was immediately followed by intense speculation about a likely successor, with potential contenders including Cardinal Angelo Scola, archbishop of Milan, Cardinal Christoph Schönborn, archbishop of Vienna, and Cardinal Marc Ouellet, the Canadian head of the Vatican's office for bishops.
Georg Ratzinger, the pope's brother, told the German media the papal resignation had been part of a "natural process". "My brother would like to have more rest in his old age," he said, adding that he had been informed of Benedict's plans some months ago.
His successor is expected to be elected by the end of March and possibly for the beginning of holy week on 24 March. Pope Benedict will honour public commitments and engagements until the date of his resignation, after which he will move to a summer residence near Rome and then to a former monastery within Vatican territory.
He will take no part in the process to elect a successor. Cardinals will meet and vote on nominees in a series of ballots until a new pope is chosen.
Federico Lombardi, a Vatican spokesman, said the pope had resigned not because of "difficulties in the papacy" or a specific illness but instead a progressive decline in his strength.
"In the last few months he has seen a decline in vigour, both of the body and spirit," Lombardi told reporters. "It was his personal decision taken with full freedom, which deserves maximum respect."
In a statement, the pontiff said: "After having repeatedly examined my conscience before God, I have come to the certainty that my strengths, due to an advanced age, are no longer suited to an adequate exercise of the Petrine ministry.
"For this reason, and well aware of the seriousness of this act, with full freedom I declare that I renounce the ministry of bishop of Rome, successor of Saint Peter, entrusted to me by the cardinals on 19 April 2005, in such a way that as from 28 February 2013, at 20:00 hours, the See of Rome, the See of Saint Peter, will be vacant and a conclave to elect the new supreme pontiff will have to be convoked by those whose competence it is."
Benedict, who became the 265th pope in 2005, has arthritis, particularly in his knees, hips and ankles. He had been due to travel to Brazil, the largest Catholic country in the world, in July for a youth festival, but concerns had been raised among Vatican observers about whether he was fit enough.
A voluntary papal resignation is rare – certainly in recent centuries. Pope Celestine V exercised his right to abdicate in 1294. Pope Gregory XII resigned in 1415 to end the western schism.