Rt Revd Jonathan Gledhill will formally confirm his decision at a meeting of the College of Canons at Lichfield Cathedral.
The 66-year-old was installed as Bishop of Lichfield in 2003. He is the 98th Bishop of Lichfield in a line going back to St Chad in 669 AD.
The post of Bishop of Lichfield is widely seen as one of the biggest jobs in the Church of England. The Diocese of Lichfield covers an area serving two million people across the Staffordshire, Shropshire and the Black Country.
In a video message, Bishop Jonathan said: "Forty years of ministry seem a good stint to Jane and me."
"It is with great mixed feelings that I make this announcement. But Jane and I know that, much as we will find it difficult to leave your love and prayers, it would not be right to continue much longer."
The Rt Revd Clive Gregory, Bishop of Wolverhampton, said: "It has been a privilege to serve under Bishop Jonathan's wise and godly leadership.
"He and Jane will be greatly missed, not least by the many who have profoundly appreciated their care and encouragement.
"Bishop Jonathan will leave a Diocese in very good heart and well equipped to face the challenges of the future."
Bishop of Stafford, Rt Revd Geoff Annas, said: "Bishop Jonathan is a man of great spirituality, humility and integrity who cares passionately for the Gospel and for all the communities that he serves. I have really valued his wisdom and guidance and sense of humour."
Bishop Jonathan's last formal engagement as Bishop of Lichfield will take place at the cathedral on September 26th.