The 69-year-old expressed his intention to leave and to spend more time with his family last year, but his wife Ally and the then-producer Kim Crowther and convinced him to stay for the soap's golden anniversary in December.
Storyliners are currently working alongside the show's new chief Phil Collinson and executive producer Kieran Roberts to pen a "fitting" departure storyline for the character.
Speaking of his decision to quit, Tarmey said: "People often ask me if I like Jack Duckworth and I always reply 'Like him, I bloody love him!' I have had the most amazing 30 years playing Jack. Because of him I have made some fantastic friends and travelled all over the world and I will be sorry to say goodbye to Jack.
"I had originally wanted to retire last year but producer Kim Crowther and my wife Ally persuaded me to stay for the show's 50th anniversary and I am glad that I made that decision."
He added: "I have had some great storylines over the past three decades and I am looking forward to seeing what Jack's final story will be."
Kieran Roberts said: "Bill Tarmey and Jack Duckworth have been a huge part of Coronation Street for 30 years and, like his many millions of fans, everyone who works on the show with Bill will be sad to see him go.
He continued: "That said we fully respect Bill's decision to retire and when he leaves Coronation Street at the end of this year we will make sure his character's send off is fitting for one of the show's all time greats."
Tarmey's final scenes are expected to tie in with the 50th anniversary celebrations in December.