In announcing his exit, the 79-year-old Swiss has called an extraordinary Fifa congress "as soon as possible" to elect a new president.
Blatter was re-elected last week, despite seven top Fifa officials being arrested two days before the vote as part of a US prosecution.
But he said: "My mandate does not appear to be supported by everybody."
Fifa was rocked last week by the arrests on charges of racketeering, wire fraud and money laundering as part of a US prosecution that also indicted 14 people.
A separate criminal investigation into how the 2018 and 2022 World Cups were allocated is also under way.
"I am very much linked to Fifa and its interests. Those interests are dear to me and this is why I am taking this decision," added Blatter.
"What counts most to me is the institute of Fifa and football around the world."
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