Paterno released a lengthy statement Wednesday announcing his decision.
He has come under pressure in recent days, as details emerged about the sexual child abuse charges against former Nittany Lions assistant Jerry Sandusky.
Specifically, he has been criticized by some for his apparent inaction when made aware of an incident that took place in 2002 in the showers of Penn State's football building by a graduate assistant, said to be current assistant Mike McQueary. Paterno dutifully informed athletic director Tim Curley, but his involvement apparently ended there.
Sandusky, a longtime assistant under Paterno who retired in 1999, was arrested Saturday and charged with 40 counts of various sexual crimes -- some of which allegedly took place on the Penn State campus. Tim Curley, who has stepped aside from his position as athletic director, and Gary Schultz, who oversaw Penn State's police department, were charged with perjury and failure to report under the Child Protective Services Law.
While Paterno is not regarded as a target of the ongoing investigation by the Pennsylvania Attorney General and state police, his knowledge of the alleged transgressions and his actions in the aftermath have come under scrutiny.
Reports that the school was planning the legendary coach's exit had surfaced Tuesday, when his usual press conference was cancelled.
More to follow.