The 50-year-old was appointed in December 2011 and led Northern Ireland to their first ever European Championship at EURO 2016, which was also their first major tournament in 30 years.
At EURO 2016, Northern Ireland made it to the knockout rounds of the tournament where they lost to Wales in the round of 16 stage.
O’Neill was appointed as Stoke City manager in November last year but agreed to see Northern Ireland through the qualifiers for EURO 2020, which would have seen them face Bosnia and Herzegovina in the play-offs.
The Coronavirus pandemic has disrupted the footballing calendar leading to the playoffs games postponed indefinitely and the tournament proper rescheduled to the summer of 2021.
“After careful consideration and following discussions with the Irish FA I feel it is only fair that now is the right time for me to step aside,” O’Neill said in a statement.
“I would have loved the opportunity to manage Northern Ireland in the Uefa 2020 play-off game versus Bosnia and Herzegovina and the chance to qualify for another major tournament, but the current situation means that this is no longer possible.
"It was important to leave the association and team in the strongest possible shape in order to not only have the best chance of qualifying for Euro 2021, but allow the new manager time to build upon the success that we have had during my eight-year tenure.
"Throughout my time here, I have been fortunate to have worked with many great coaching, medical and support staff who have all contributed to our successes and shared in some great moments.
"As for my players, past and present, I would like to thank them all for an overwhelming level of commitment and professionalism that has helped to deliver so many unforgettable highs and great experiences for us all."
