The World of Our Own boyband, made up of Nicky Byrne, Kian Egan, Mark Feehily and Shane Filan, said in a statement that they "want to have a well-earned break".
They will bow out with a farewell tour in May 2012, playing nine gigs in most major cities in the UK.
In a statement, Westlife said: "Today we announce our plan to go our separate ways after a greatest hits collection this Christmas and a farewell tour next year.
"The decision is entirely amicable and after spending all of our adult life together so far, we want to have a well-earned break and look at new ventures.
"Over the years Westlife has become so much more to us than just a band. Westlife are a family. We would like to thank our fans who have been with us on this amazing journey and are part of our family too.
"We never imagined when we started out in 1998 that 14 years later we would still be recording, touring and having hits together. It has been a dream come true for all of us."
> Westlife to split: Five career-defining songs - video
> Westlife to split: Career in pictures
> Westlife to split: What was their best song? - poll
Reports earlier this month claimed that Westlife would go on hiatus with a view to eventually recording an 11th studio album.
Since forming in 1998, the group have had 14 number one singles in the UK. Brian McFadden left in March 2004.
Westlife's Greatest Hits collection will be released on November 21, while new single 'Lighthouse' will be available to download from November 13.
Watch the video for Westlife's 1999 classic 'Flying Without Wings' below:
Scroll through the gallery below for a look at Westlife's career in pictures: