The octogenarian will continue to host the Christmas specials, Children in Need episode and other one-offs, but has decided not to take part in the main show any more.
"After 10 wonderful years and 11 series, I believe it is now the right time to step down from the rigours of presenting the Strictly live shows," Forsyth said.
"I am very proud of what the show has achieved and confident it will entertain the nation for many years to come. I am also delighted that by presenting the Christmas and Children in Need shows I will continue to have a strong association with Strictly."
He added: "In addition, I am looking forward to the specials planned with the BBC as well as some live theatre shows, so before anyone asks.... I am not retiring quite yet!"
Forsyth's co-host Tess Daly said: "It's been an absolute pleasure and a privilege working alongside Bruce for the last decade. He's a TV legend, a total gentleman and someone my family and I are honoured to call a true friend.
"We've spoken about it, and he knows how much I love him and how much he'll be missed - but he's not going to escape me that easily, as we'll be keeping him dancing when we're reunited for the Children in Need and Christmas specials!"
Sir Bruce is one of the great showbiz legends of our time and our success is due in vast amounts to him. This is not farewell!— BBC Strictly (@bbcstrictly) April 4, 2014
Forsyth's future on the show has been in doubt for some time, with BBC One controller Charlotte Moore admitting last month that it was "really important" to have a "conversation" about his role.
She has now said: "Sir Bruce Forsyth is one of the great showbiz legends of our time and Strictly's success is due in vast amounts to him. I am so pleased he will continue to be part of the Strictly family and promise viewers that we haven't seen the last of him on BBC One."
Meanwhile, the BBC's controller of entertainment commissioning Mark Linsey said: "One of the joys of my job is working with Sir Bruce Forsyth and long may that continue. He is the all-time master and commander when it comes to Great British entertainers and Strictly owes him such a great deal.
"This is not a farewell, but you can't blame him for wanting to take things a little bit easier."
Strictly Come Dancing will return later this year.
Bruce Forsyth: Career in pictures: