The Take That star put an end to speculation about his future on the ITV series during his critique of Rough Copy's performance on tonight's (October 12) first live show.
He told the group: "I've been here for three years and I'm so glad that for my last year on the show I get to mentor you guys."
A further statement from Barlow was later published on the DawBell publicity firm's Twitter account.
"I've had an amazing time on X Factor these past three years. A show like this needs to stay fresh and exciting ...so it's a great opportunity for someone to come in and take the show past its incredible ten year anniversary," Barlow was quoted as saying.
His statement continued: "Next year is looking to be a busy year for me & XF is a full time job so it felt like the right time to hand over the baton. I've loved being a part of the show and have met and worked with some fantastic people
"But most importantly, more than ever, I want to go out with the winning act this year. Come on the groups!"
Earlier this week, Radio 2 DJ Chris Evans revealed that Barlow intended to leave, but tonight's statement marks the first time that the head judge has commented on the subject.
Evans said: "By the way, this will be Gary's last year on The X Factor... because he told me last week."
Barlow recently said that he will always put Take That ahead of The X Factor, explaining that he sees himself as "an artist, first and foremost".
He has announced plans to embark on a solo headlining tour in spring 2014, following the release of his new album next month.
The X Factor continues tomorrow night (October 13) at 8pm on ITV.
> X Factor '80s Week: Our 5 favourites
Photo Gallery: 'The X Factor' 2013: First live show