Steve Jobs has resigned as Apple chief executive, effective immediately.
The company said that Mr Jobs will be replaced by Tim Cook, who was the company's chief operating officer.
It said Mr Jobs has been elected as Apple's chairman.
Jobs, the mind behind the iPhone, iPad and other devices that turned Apple into one of the world's most powerful companies, said he can no longer handle the job.
The move appears to be the result of an unspecified medical condition for which he took an indefinite leave from his post in January.
In a letter addressed to Apple's board and the Apple community, Mr Jobs said he "always said if there ever came a day when I could no longer meet my duties and expectations as Apple's CEO, I would be the first to let you know. Unfortunately, that day has come".
Apple said Mr Jobs was elected board chairman and Mr Cook is becoming a member of its board.
The company said Mr Jobs gave the board his resignation and suggested Mr Cook be named the company's new leader.
The January leave was Mr Jobs' third medical leave over several years. He had previously survived pancreatic cancer and received a liver transplant.
Steve Jobs background
Mr Jobs helped to set up the company in 1976 after dropping out of college.
In October 2003 he was diagnosed with pancreatic cancer, although details emerged only the following year after he revealed he was to step back from the company to fight the disease after a special diet had failed to cure it.
Fears about his health resurfaced several years later, with commentators noting his gaunt features and weight loss.
In 2009, days after denying his ill health to shareholders, Mr Jobs revealed he was to take a leave of absence of six months. His exact issues were not disclosed, although it emerged his treatment had culminated in a liver transplant.
He returned to the company that summer and made his first public appearance in September of that year, as ebullient as ever about the company's products.
During each of Jobs's medical absences, Cook had been handed the Apple reins and is seen by company insiders, shareholders and analysts as a safe pair of hands. "I have great confidence that Tim and the rest of the management team will do a terrific job executing the exciting plans we have in place for 2011," Jobs said.
While Cook was in charge, Schiller was the public face of Apple. A charismatic character who joined Apple in 1997, he took over Jobs' highly lauded keynote presentations at product launches during previous absences.
From Macintosh to the iPad
1976 Jobs co-founds Apple
1980 Apple's stock market flotation is biggest since Ford in 1956
1985 Leaves Apple to concentrate on new ventures, including Pixar and NeXT
1997 Returns to Apple promising to revitalise the flagging company
2000 Resumes as Apple CEO
2002 iPod launched
2003 iTunes launched
August 2004 announces he has been diagnosed with pancreatic cancer and has undergone surgery to remove tumour.
2007 iPhone launched
June 2009 Returns to work six months after taking time off for liver transplant as part of cancer treatment
January 2010 iPad launched
17 January 2011 Announces he is taking a break from day-to-day operations to concentrate on his health.
11 March 2011 iPad 2 launched
24 August 2011 Jobs resigns as Apple CEO