The Briton, who turned 59 last week, will hand over his responsibilities to executive directors Toto Wolff (business) and Paddy Lowe (technical) and formally leave the British-based team on Dec. 31.
The official announcement ended one of the longest running sagas of the season, with speculation surrounding Brawn's future since before the championship started in March.
"The most important consideration in my decision to step down from the role as team principal was to ensure that the timing was right for the team in order to ensure its future success," Brawn said in the statement.
"The succession planning process that we have implemented during this year means we are now ready to conduct the transition from my current responsibilities to a new leadership team composed of Toto and Paddy."
His departure will bring change for drivers Lewis Hamilton, Britain's 2008 world champion with McLaren, and Germany's Nico Rosberg although the succession has been widely discussed and Brawn's successors have had time to work themselves in.
Lowe was with Hamilton at McLaren previously while Austrian Wolff, a former Williams team director, is also in charge of Mercedes's broader motorsport activities.
Brawn is one of the most successful and respected figures in the sport after winning a string of world championships with three different teams.
The bespectacled Englishman, a keen Manchester United football fan, was the tactical brains behind Michael Schumacher's seven world championships - two with Benetton and then five in a row at Ferrari between 2000-04 .
After leaving Ferrari at the end of 2006 to take a sabbatical, and spend some time fishing, he joined the Honda team at the end of 2007 and led them until the Japanese manufacturer withdrew from the sport a year later.
With Brawn GB, the team that emerged from the remains of Honda and was later sold to Mercedes, he won both world championships in 2009.
NEW ERA
Brawn said that, with a new V6 turbo engine being introduced in 2014 and significant changes to the regulations, now was the right time to go "to begin a new era of team management".
"The team is uniquely positioned to succeed in 2014 and I am proud to have helped lay the foundations for that success," added the Briton, who steered Mercedes to second place overall this season behind Red Bull.
"In its different guises over the past six seasons, this team has delivered some of the most memorable moments of my career. Our second place in this season's Constructors' Championship is an important milestone on the road to championship success," Brawn added.
"I am confident that the future will hold just as much success for the team and will take real pride in having played my own part in those achievements."
Non-executive chairman Niki Lauda thanked Brawn for his contribution and said Wolff and Lowe were the right men to take the team forward.
"When you consider the step that has been made from finishing fifth in 2012 to the second place that we have secured this season, he has been the architect of this success," the Austrian triple champion said.
"He put the plans in place to recruit key people since early 2011, and the performance this season shows that the team is on the right track.
"We have had long discussions with Ross about how he could continue with the team but it is a basic fact that you cannot hold somebody back when they have chosen to move on. Ross has decided that this is the right time to hand over the reins to Toto and Paddy and we respect his decision."
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