Cuba's ailing leader Fidel Castro has said he will not accept another term as president, ending 49 years in power.
"I neither will aspire to, nor will I accept, the position of president of the council of state and commander in chief," he told the newspaper, Granma.
The 81-year-old handed over power temporarily to his brother, Raul, in July 2006 when he underwent surgery.
US President George W Bush said the news should mark the beginning of a transition towards democracy for Cuba.
"The international community should work with the Cuban people to begin to build institutions that are necessary for a democracy, and eventually this transition ought to lead to free and fair elections," he told reporters in Rwanda.
"And we're going to help. The United States will help the people of Cuba realise the blessings of liberty." The European Union meanwhile said it was ready to seek ways to relaunch ties with Cuba that have been almost completely frozen under Mr Castro.
Mr Castro has ruled Cuba since leading a communist revolution in 1959.
In December, Mr Castro indicated that he might possibly step down in favour of younger leaders, saying "my primary duty is not to cling to any position".
Soon afterwards, Raul Castro appeared to suggest that his older brother still had an important political role to play, saying the president still had full use of his mental faculties and was being consulted on all important policy issues.
'Not saying farewell'
In the letter, published on Granma's website during the middle of the night in Cuba, Mr Castro said he would not accept another five-year term as president when the National Assembly meets on Sunday, because of the health problems.
"It would betray my conscience to take up a responsibility that requires mobility and total devotion, that I am not in a physical condition to offer," he wrote. Mr Castro said he had declined to step down after undergoing emergency intestinal surgery in 2006 to avoid dealing a blow to his government before "the people" were ready for change "in the middle of the battle" with the US.
"To prepare the people for my absence, psychologically and politically, was my first obligation after so many years of struggle," he added.
Despite the announcement of his impending retirement, the Cuban leader insisted he was "not saying farewell".
"I just want to carry on fighting like a soldier of ideas," he added. "I will continue writing under the title, Reflections of Comrade Fidel."
"I will be one more weapon in the arsenal that you can count on. Perhaps my voice will be heard. I will be careful."
The National Assembly is widely expected to elect 76-year-old Raul Castro as his successor, although analysts say there is speculation about a possible generational jump with Vice-President Carlos Lage Davila, 56, a leading contender.
"There is also the intermediate generation which learned together with us the basics of the complex and almost unattainable art of organising and leading a revolution," Mr Castro wrote in Tuesday's letter.
If elected, Raul Castro has indicated that major economic reforms and "structural changes" could be on the way. Fidel Castro did not say whether he would continue to be involved in government affairs as a member of the Council of State or retain his post of secretary of the ruling Communist Party.
The Cuban ambassador to the Netherlands, Oscar de los Reyes, told the BBC that Mr Castro "embodies to a very large extent what Cuba is today" and would always remain Cuba's "elder statesman".
"Fidel will always preside over our revolution... In our minds and hearts he will always be the leader," he said.
There was very little reaction to Mr Castro's decision in Havana on Tuesday morning, and it was not until 0500 (1000 GMT) that official radio reported the news.
The BBC's Michael Voss in the capital says nobody knows whether Mr Castro's decision not to seek another five-year term has been prompted by a further decline in his health - it has been an official secret since the moment he was taken ill.
The president has not been seen in public for 19 months, although the government occasionally releases photographs and pre-edited video of him meeting visiting leaders from around the world.
Last month, Mr Castro was shown talking to his Brazilian counterpart, Luiz Inacio Lula da Silva, who described him as being lucid and in good health.
Mixed legacy
In power since he led a communist revolution which ousted the regime of President Fulgencio Batista in 1959, Mr Castro has been a dominant force in Latin American politics and a thorn in the side of the United States.
Under his leadership, Cuba underwent an economic and social transformation.
Most foreign and local businesses were nationalised, land reform was introduced, and education and health care for the poor improved. At the same time, Mr Castro was criticised for not restoring democracy and ruling with absolute power. His government saw off an early threat from Cuban exiles, backed by the US, who launched an abortive invasion at the Bay of Pigs in 1961.
The following year saw the Cuban missile crisis, when the US and the Soviet Union came to the brink of war over the presence of Soviet nuclear warheads in Cuba.
Mr Castro also backed a string of left-wing leaders in South America and Africa and, in 1975, sent thousands of troops to fight in Angola.
It is said that Mr Castro has been the target of many CIA-sponsored assassination plots as a result of such policies - in 1999 a Cuban interior ministry official put the figure at 637.
Washington has also imposed an economic embargo on Cuba for more than four decades, which helped cripple the Cuban economy in the 1980s after the Soviet Union withdrew financial aid and subsequently broke up.
A tourism boom along with a rapprochement with oil-rich Venezuela, run by Mr Castro's great friend, Hugo Chavez, has allowed the economy recover slowly in recent years.
Our correspondent says the news of his retirement will take some digesting by Cubans, 70% of whom have known no other leader.
Mr Castro will leave a mixed legacy, he adds, with both friend and foe recognising him as an iconic leader and major figure in the post-war era.
Fidel Castro announces retirement
