Harding was appointed to the job in December 2007, having previously been the newspaper's business editor.
"News International and Times Newspapers Ltd have announced the resignation of James Harding as Editor of the Times," read a statement.
"Mr Harding informed the national independent directors of The Times this morning. He will leave at the end of the month.
"The national independent directors of The Times will now be consulted on a replacement for James."
Harding said: ""For any journalist, it is an extraordinary privilege and a point of pride to see your work appear beneath the masthead of The Times, the greatest name in newspapers in the world.
"I feel hugely honoured to have been given the opportunity to edit the paper and deeply grateful for the experience of working among the finest journalists in the world.
"This paper has an unrivalled history and, I am extremely confident, a long and impressive future ahead of it."
He added: "It has been made clear to me that News Corporation would like to appoint a new editor of The Times.
"I have, therefore, agreed to stand down. I called Rupert this morning to offer my resignation and he accepted it."
News Corp chairman Rupert Murdoch said of Harding: "James has been a distinguished editor for The Times, attracting talented staff to the paper and leading it through difficult times.
"I have great respect for him as a colleague and friend, and truly hope we can work together again."
The BBC has suggested that Harding will be replaced by John Witherow, who is currently editor of The Sunday Times.
Earlier this month, media columnist Roy Greenslade said that he had texted Harding to ask if rumours of a move to the Wall Street Journal, another News Corp outlet, were true.
"It isn't so," Harding reportedly replied at the time.