US president Barack Obama has paid tribute to Chuck Hagel after he accepted his defence secretary's resignation.
The president told a press conference that Mr Hagel has concluded it is an "appropriate time" for him to complete his service.
Mr Hagel will stay in place at the Pentagon until his successor is confirmed.
The defence secretary has had a rocky tenure of nearly two years in which he has struggled to break through the White House's insular foreign policy team.
He stepped down under pressure amid multiple foreign policy crises, including the rise of the Islamic State group.
But in remarks made at the White House, the US president called Mr Hagel "an exemplary defence secretary" and a steady hand for strategy and budget.
Mr Obama said he will always be grateful that Mr Hagel had always "given it to me straight".
Mr Hagel said the Obama administration has put the defence department and the United States on a stronger course toward stability and security, and said he was "immensely proud" of what he had achieved.
The outgoing defence secretary said the US had prepared itself, its allies and Afghanistan's military for a successful transition.
The US has strengthened alliances and partnerships overseas, he added, while responding successfully to global crises.
And Mr Hagel said the Pentagon has launched important reforms that will prepare the military for future challenges.