After amassing 20 trophies, including six Premier League titles and the club’s first Champions League, Guardiola will step aside following Sunday’s match at home to Aston Villa.
“I think the club needs a new manager, new energy with these incredible players that we have right now and you start to write another chapter,” said Guardiola at his pre-match press conference.
“I feel I will not have the energy that requires, (matches) every three days, the expectations to fight for the titles, with being in front of the players.”
One of Guardiola’s former assistants Enzo Maresca is reportedly set to take charge next season.
Maresca, 46, has been out of work since leaving Chelsea in January, where he won the Club World Cup and Conference League in his only full season in charge.
Guardiola will remain associated with the club as a global ambassador for the City Football Group.
However, Guardiola ruled out an immediate return to the game in a coaching role.
ince taking charge of Barcelona in 2008, the 55-year-old has had just one year out of the sport, when he took a sabbatical in New York before joining Bayern Munich in 2013.
“I will not train for a while,” added Guardiola.
“It’s not 10 years. I’ve been, except for a year in New York, 17, 18 years, every three days, three days, three days, three days.
“I need to breathe a little bit, and relax. It’ll be a while, that is my feeling right now.”
City announced that a stand at the Etihad Stadium will be named in Guardiola’s honour and a statue has been commissioned of the Catalan.
“It’s been the experience of my life I would say, otherwise I would not be here 10 years,” he said.
“I did my best, I gave everything, until the last drop of what I have. I am leaving with incredible peace, a sense of peace in my soul, that I gave everything to this club to be in a better position.”
City narrowly missed out on the Premier League title this season to Arsenal, managed by one of Guardiola’s former assistants Mikel Arteta.
But the City boss will depart with silverware in his final campaign after lifting both the League Cup and FA Cup.
A parade through Manchester will take place on Monday to mark those achievements and Guardiola’s legacy.
