Speculation about Duncan's future at Channel 4 reached fever pitch at this year's Edinburgh TV Festival, with multiple reports indicating that his departure was "imminent".
It is understood that Duncan agreed the terms of his departure with Channel 4's board this morning.
In a statement, Duncan said: "By any measure, it’s been a great five years, during which time we’ve punched well above our weight, out-performing our immediate rivals both creatively and commercially. The British public are watching and using more of our TV programmes, films and online content and services than ever before. Having coped with dramatic structural change and an unprecedented downturn substantially better than most, I believe Channel 4 is in a great position to face the future with real confidence.
"Our future as the main source of public service competition to the BBC has been secured, with the Digital Britain report strongly endorsing our vision for Channel 4 as a digital public service network and the updated remit we proposed due to be enshrined in legislation in the autumn.
"The publication of the Digital Britain report was also a natural moment for me to take stock and since then I have been in discussion with Luke and other board members about the future. Channel 4 is facing a further period of change, with a fresh regulatory cycle looming and with the cancellation of Big Brother signalling the most significant creative renewal in our history. We have mutually agreed that this feels like the appropriate moment for me to hand on the baton to someone else and to move on to a fresh challenge after more than five years at the helm."
Duncan said that it was his intention "to ensure a period of stable leadership" that would enable Channel 4 to appoint a new chief executive "in parallel with Ofcom's appointment of a new chairman".
He added: "I hope that clarifying my intentions will allow everyone at Channel 4 to get on with the job at hand without the distracting speculation of recent weeks."
Channel 4 chairman Luke Johnson said that Duncan had provided "effective leadership" during his tenure and that the broadcaster "will immediately get on with the process of appointing his successor".