The 69-year-old republican veteran told the annual Sinn Fein Ard Fheis in Dublin it would be his last as leader.
A special meeting of the party will be called next year to elect a successor.
The TD for Co Louth, who has been party president since 1983, also told delegates he would not run in the next election in the Irish Republic.
He told the annual conference in the RDS arena in Dublin: “Leadership means knowing when it is time for change and that time is now.”
Mr Adams has led Northern Ireland’s second largest political party for 34 years, making him one of the longest serving political leaders in the world.
It has been a highly divisive career with some hailing him as a peacemaker while other branded him a terrorist.
He has been accused of being a senior IRA member during the Troubles, something he has always strenuously denied.
In later years he became known across the globe as the face of the republican movement during its shift from violence to peace.
Born in Ballymurphy in West Belfast in October 1948, Adams became an active republican while still a teenager.
He was interned – imprisoned without charge – in 1972. During his internment he took part in ceasefire talks with the British government on behalf of the IRA.
The talks failed and were followed by a series of IRA bombings across Belfast in one day – known as Bloody Friday – killing nine people and injuring 130.
In 1983 he was elected MP for West Belfast and Sinn Fein President.
The then British Prime Minister Margaret Thatcher banned his voice from the airwaves but he remained in the news.
He survived a murder attempt by loyalist paramilitaries in 1984 and another in 1988.
Adams went on to lead Sinn Fein to the negotiating table at Stormont, persuaded the IRA to call a ceasefire and pursued a political settlement in the form of the Good Friday Agreement which led to the Stormont coalition in October 2006.
In January 2011 Adams resigned as West Belfast MP to run for election in the Republic of Ireland and was elected as a member of the Irish Parliament.
Following the collapse of powersharing at Stormont in January, he has been actively involved in negotiations aimed at restoring the Northern Ireland Executive.