The 85-year-old Pope announced his bombshell resignation in Latin during a meeting of Vatican cardinals, surprising even his closest collaborators, even though Benedict had made clear in the past he would step down if he became too old or infirm to do the job.
Benedict called his choice "a decision of great importance for the life of the church."
His 89-year-old brother, Georg Ratzinger, said doctors had recently advised the Pope not to take any more trans-Atlantic trips.
"His age is weighing on him," Mr. Ratzinger told the dpa news agency. "At this age my brother wants more rest."
Benedict emphasized that carrying out the duties of being pope – the leader of more than a billion Roman Catholics worldwide – requires both physical and mental energy.
"In order to govern the bark of St. Peter and proclaim the Gospel, both strength of mind and body are necessary – strengths which in the last few months, have deteriorated in me to the extent that I have had to recognize my incapacity to adequately fulfil the ministry entrusted to me," he told the cardinals.
The pontiff had been due to attend World Youth Day in July in Rio de Janeiro; by then his successor will have been named and will presumably make the trip.
Benedict himself raised the possibility of resigning if he were simply too old or sick to continue on, when he was interviewed in 2010 for the book Light of the World.
"If a pope clearly realizes that he is no longer physically, psychologically and spiritually capable of handling the duties of his office, then he has a right, and under some circumstances, also an obligation to resign," Benedict said.
But the announcement still took the Vatican – and the rest of the world – by surprise.
"All the cardinals remained shocked and were looking at each other," said Monsignor Oscar Sanchez of Mexico who was in the room when Pope Benedict delivered his announcement.
The Vatican newspaper, L'Osservatore Romano, said Benedict decided to resign after his March, 2012, trip to Mexico and Cuba, an exhausting but exhilarating trip where he met with fellow-octogenarian Fidel Castro and was treated to a raucous and warm welcome.
The Vatican said Benedict would live in a congregation for cloistered nuns inside the Vatican, although he will be free to go in and out. Much of this is unchartered territory. Father Lombardi said he isn't even sure of Benedict's title – perhaps "pope emeritus."
The timing of Benedict's announcement was significant: Lent begins this week on Ash Wednesday, the most solemn period on the church's calendar that culminates with Holy Week and Easter on March 31. It is also the period in which the world witnessed the final days of John Paul's papacy in 2005.