"My relationship with Scuderia Ferrari will finish at the end of 2020," Vettel said in a statement from the team.
"In order to get the best possible results in this sport, it's vital for all parties to work in perfect harmony. The team and I have realised that there is no longer a common desire to stay together beyond the end of this season."
Ferrari, whose shield features a prancing horse, have not named a replacement for Vettel who won four titles at Red Bull before moving in 2015.
But he has not been able to replicate that success and Ferrari, who have not boasted a world champion since Kimi Raikkonen in 2007, have been overshadowed by Mercedes’ streak of six consecutive constructors' titles as well as drivers' championships.
Worse still for Vettel, the 240-race veteran was frequently eclipsed last season by Charles Leclerc.
The 22-year-old from Monaco claimed seven pole positions in his debut season with the team and won two races including the Italian Grand Prix at Monza.
Leclerc hailed Vettel's influence on Twitter.
I've never learnt so much as I did with you as my teammate.
— Charles Leclerc (@Charles_Leclerc) May 12, 2020
Thank you for everything Seb. pic.twitter.com/jRHEsvMYvg
Leclerc added: "It's been a huge honour for me to be your teammate. We've had some tense moments on tracks.
"Some very good ones and some others that didn't end as we both wanted, but there was always respect, even though it wasn't perceived this way from the outside."
Disruption
The Formula 1 season, like the rest of the sporting calendar, has been severely affected by the coronavirus.
The 23-race campaign should have started in March at the Australian Grand Prix in Melbourne. But that was called off just as the effects of the pandemic began to take hold.
Ten races have been cancelled or postponed since then and the season is scheduled for a relaunch without fans in attendance in Austria on 5 July. Vettel’s announcement will add an extra layer of intrigue into the proceedings.
Mattia Binotto, Ferrari’s team principal, said: "It was not an easy decision to reach, given Sebastian's worth as a driver and as a person.
"There was no specific reason that led to this decision, apart from the common and amicable belief that the time had come to go our separate ways in order to reach our respective objectives."
