Leyland, 68, has been a manager for 22 years in the major leagues and part of professional baseball for 50 years.
He announced his resignation at a news conference in Detroit two days after the Tigers lost the American League Championship Series to Boston.
"When it's time, it's time, and it's time to step down," Leyland said.
"It's not goodbye, because I will be in the organization doing something," he added.
Leyland led four teams during his managerial career - the Pittsburgh Pirates, Florida Marlins, Colorado Rockies and the Tigers, compiling a 1769-1728 record.
He won the World Series with the Marlins in 1997.