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Palin made the announcement at a news conference at her home in Wasilla, Alaska.
"People who know me know that besides faith and family, nothing's more important to me than our beloved Alaska," said Palin.
"I am determined to take the right path for Alaska even though it is not the easiest path," she said.
Palin announced that she will relegate the power of governor to Lieutenant Governor Sean Parnell in order to serve Alaska's best interests.
Parnell already indicated that he will seek election to the governor's office in 2010.
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Former U.S. Republican Alaska Governor Sarah Palin announces that she will resign this month and will not run for re-election as governor in Wasilla, Alaska July 3, 2009 in this video frame grab |
The transfer of power will occur following the Governor's picnic in Fairbanks on July 26, according to a statement released by Palin's office.
"At that point in time, Lieutenant Governor Sean Parnell will be sworn in and Lieutenant General Craig Campbell will assume his role as Lieutenant Governor," the statement said.
Palin, whose term would have ended in 2010, claimed that the resignation was intended to avoid a lame-duck final months of her term.
"Once I decided not to run for re-election, I also felt that to embrace the conventional 'Lame Duck' status in this particular climate would just be another dose of 'politics as usual,' something I campaigned against and will always oppose," she said.
Born in 1964, Palin was elected governor of Alaska in November 2006, becoming the first woman and the youngest person to hold the state's top political job.
Palin was catapulted onto the U.S. national political arena after Republican presidential candidate John McCain chose her as the running mate in the 2008 presidential elections.
Speculations have been swirling recently that Palin would not seek re-election as Alaska governor in 2010 as she eyes a political career on the national stage.
Palin has long been rumored to be considering a run at the Republican presidential nomination in 2012, Alaska's local TV channel KTUU said in a report about her resignation.
Palin did not reveal her next move while announcing the pending resignation. However, she hinted at her future aspirations.
"I look forward to helping others -- to fight for our state and our country, and campaign for those who believe in smaller government, free enterprise, strong national security, support for our troops, and energy independence," she said.