Brown, 67, who once heckled U.S. President George W. Bush when the president addressed Australia's parliament, said he was leaving politics to spend more time writing, taking photographs and bush walking in his home state of Tasmania.
However, his departure will not affect the Greens support for Prime Minister Julia Gillard's minority government, or force a by-election, as his seat in the upper house Senate will be filled by another Greens member.
"It is prime time to hand over the reins," Brown told reporters, adding he would leave parliament in June but would remain active in his party's campaigns and causes.
"I will be a Green until the day I die, if not for a long time after that. Every breath I take will be as a Green."
Brown entered the national parliament in 1996 after a stint in the Tasmanian parliament. He became a national figure in the early 1980s when he led a protest campaign to stop a dam project in Tasmanian wilderness.
Brown is the public face of the Greens, and he helped build the party from just one member in the national parliament a decade ago to nine senators and one lower house member after 2010 elections, where the party attracted a record of about 12 percent of the national vote.
He has been a strong advocate of putting a price on carbon pollution, and was a key figure in negotiating Australia's carbon tax which starts in July and will force about 500 companies to pay A$23/tonne for carbon emissions.
He has also championed higher taxes for the mining industry, protection of old-growth native forests, human rights in China and gay marriage, making no secret of his homosexuality.
Brown has also been a strident critic of the war in Afghanistan and Australia's close military ties with the United States, which prompted him to interrupt's Bush's speech to Australia's parliament in 2003 by calling for Bush to release two Australians then being held in Guantanamo Bay.
Gillard praised Brown for his contribution to Australian politics over the past 30 years.
"Throughout his time in elected office, Bob Brown has been a figure of integrity with a deep love for this country and its environment," Gillard said in a statement.
Brown's deputy, Christine Milne, was elected to replace him as the party leader, and she said she would work to build on Brown's legacy.
"For 25 years, Bob has been an inspiration to millions of Australians and a great force for good in our country," Milne said, adding she would honor the agreement signed with Gillard to support her minority government.
(Reporting by James Grubel; Editing by Paul Tait)
Reuters