Pep to leave Barca at end of season
"Pep Guardiola will not continue as coach next season," Barca President Sandro Rosell told a news conference.
"Thank you for your work and your love."
Guardiola, who wants to recharge his batteries, added: "I'm sorry for the confusion in recent weeks. I've always wanted short contracts because the demands at Barcelona are so big.
"Now we were out of the two main competitions, it was a good time to announce it.
"The reason is simple. Four years, that gets everyone tired. The new coach will give things that I can't give anymore."
Speculation about his future intensified after holders Barca were knocked out of the Champions League by Chelsea 3-2 on aggregate in their semi-final on Tuesday.
That followed a 2-1 home loss to arch rivals Real Madrid on Saturday that meant they are likely to miss out on a fourth straight La Liga title.
Spanish media reported that Athletic Bilbao coach Marcelo Bielsa, former Barca player Luis Enrique, now in charge at AS Roma, and Ernesto Valverde, who played for Barca and went on to coach clubs including Bilbao, Espanyol and Villarreal were likely candidates to replace Guardiola.
Other names mentioned were Andre Villas-Boas, sacked by Chelsea last month, and Laurent Blanc and Vicente del Bosque, the coaches of France and Spain respectively.
Guardiola has enjoyed a hugely successful stint at the helm of the Catalan club, winning 13 trophies in four seasons while playing a style of football that has been widely acclaimed as the best in the world.
However, the longer he has delayed a decision on his future the more speculation has grown he might be lured to another club, with reports linking him to the Chelsea and Inter Milan jobs, among others.
Some suggested he was in line to become the next England manager or that he was planning to take a sabbatical.
He has preferred to renew his Barca contract on an annual basis and waited until February 8 last year before agreeing a new deal.
He then went on to capture a third consecutive La Liga title and a second Champions League crown, as well as the Spanish and European Super Cups and the Club World Cup. Their success built on ball retention with team's fortunate to enjoy 30 percent of possession against them.
Barca have a chance to claim more silverware this season in the King's Cup and play Athletic Bilbao in next month's final.