The Northern Irishman took the reins as caretaker boss in March 2010 and was given the job on a permanent basis ahead of the 2010-11 season.
He oversaw four trophy-laden years at Celtic Park, guiding the team to three league titles and two Scottish cups to further enhance his standing at the club after seven years there as a player between 2000 and 2007.
Lennon has been heavily linked with the vacant position at Norwich City in recent weeks, and it was suggested in some quarters that he held concerns over Celtic's playing budget for next season.
However, following the announcement on Thursday, Lennon had nothing but good things to say about Celtic and stated his intention to help the club find his successor.
"I have supported Celtic all my life and the club will always be part of me," he told Celtic's official website.
"It was an absolute honour to play for this great club, to captain the team and of course to become Celtic manager, a position which I cherished dearly.
"However, I feel the time is now right to move on to a new challenge.
"Of course, I am very pleased that I will be leaving Celtic as Scottish champions and with the club in such good health. I wish the club nothing but good fortune going forward.
"Serving the club was always a privilege. I have always given my best and aimed to do all I can to ensure success for Celtic, as a supporter it was all I wanted.
"I will now assist the club in appointing my successor. As ever, we will need our fans' support and I am sure they will give the club and the new manager the same great backing which they gave to myself."
