Andrew Strauss called time on his career in a hastily arranged press conference at the Home of Cricket.
Strauss, 35, played 100 Tests and will retire from all cricket, bringing to a close a 15-year first-class career which started at Durham MCC University in 1998.
The announcement was made in the ECB offices at Lord's, with ODI captain Alastair Cook announced as Strauss' replacement. England's next Test match is in Ahmedabad, India, in November.
England lost Strauss' 50th Test as captain against South Africa at Lord's last month, surrendering their position as the ICC's number one ranked Test side to the tourists.
Strauss' list of achievements as captain will stand the test of time; back-to-back Ashes victories, first win Down Under in 24 years and the rise to number one in the Test rankings against India in 2011.
However, he admitted his increasing struggles with the bat had led him into retirement.
"It hasn't been something which occurred overnight, it's been a gradual feeling which has grown over the last six or 12 months," he said.
"The driver to it all quite frankly was my form with the bat. I wasn't going to improve batting wise. I'd run my race.
"If I'm honest, I'd very much like to go out on my own terms with my head held high and I think this is the right time for that."
Strauss confessed he had let Andy Flower know during the recent series that he felt he might be heading towards the end of his career.
However, he was at pains to stress that the decision was not related to the Kevin Pietersen saga which had taken all of the headlines prior to his own 100th Test.
"It didn't affect my decision in any way," he added."I first spoke about it with Andy Flower before the Kevin Pietersen incident reared its head, and it hasn't been a consideration in my decision."
Cook takes over Strauss hands the reigns over to his long-time deputy Cook at a time when England have suffered six defeats in their last 11 Tests and a tricky four match series in India the next challenge on the horizon.
"I have great confidence in Andy Flower and Alastair Cook's ability to lead this side forward," Strauss said.
"I'm conscious that at the end of the South Africa series, after losing the number one ranking, it's time for the side to refresh and have a little think about how best to regain that number one ranking. And this is a great way for us to do that.
"Alastair is going to come in and instil a huge amount of energy and I'm sure he's rightly excited to be taking on this challenge... If people think that I should still be part of the side then that kind of validates by decision because I'd hate to have outstayed my welcome."
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