O'Connor's decision to leave creates the first opening on the court in 11 years. Appointed by Ronald Reagan in 1981, O'Connor was the first woman to serve on the Supreme Court and in recent years emerged as a critical swing vote in many of the court's narrowly decided opinions on issues ranging from abortion and the death penalty to limiting campaign donations.
Although much of the public speculation had focused on ailing Chief Justice William Rehnquist, O'Connor's announcement, made public in a brief statement, took many by surprise.
"This is to inform you of my decision to retire from my position as an associate justice of the Supreme Court of the United States, effective upon the nomination and confirmation of my successor," her statement read. "It has been a great privilege indeed to have served as a member of the court for 24 terms. I will leave it with enormous respect for the integrity of the court and its role under our constitutional structure."
President Bush hailed her as a "patriot" and a jurist of "great intellect, wisdom and personal decency."
"America is proud of Justice O'Connor's distinguished service," Mr. Bush said. "She has been a discerning and conscientious judge and a public servant of complete integrity."
The president also said he had ordered his staff to prepare a list of possible candidates to replace O'Connor.
He pledged that his choice would be one who will "faithfully interpret the Constitution and the laws of our country" and urged the Senate to confirm his choice before the court reconvenes in October.
"The nation deserves and I will select a Supreme Court justice that Americans can be proud of. The nation also deserves a dignified process of confirmation in the United States Senate, characterized by fair treatment, a fair hearing and a fair vote," he said.
White House officials later said the president would not nominate a replacement before he returns from a trip to Europe on July 8.
When President Reagan tapped the Arizona Appeals Court justice to the nation's highest court, he was fulfilling a promise he had made during his presidential campaign to appoint a woman to the court. But for O'Connor, she recognized the pressure of role she had been handed.
"My concern was whether I could do the job of a justice well enough to convince the nation that my appointment was the right move," the Associated Press quoted her as saying at a law school in 2000. "If I stumbled badly in doing the job, I think it would have made life more difficult for women, and that was a great concern of mine and still is."
Her role evolved over the years, from one of the court's more conservative voices to one of moderation. She often became the deciding justice in some of the court's most polarized decisions, joining the majority of the more conservative justices who decided to end the 2000 recount that handed the election to then-Gov. George W. Bush, but backing the majority of liberal justices in allowing abortions when the woman's health is endangered.
O'Connor saw herself and her eight fellow justices as something akin to nine firefighters.
"When (someone) lights a fire, we invariably are asked to attend to the blaze. We may arrive at the scene a few years later," she said.
Like many members of the court, she rarely spoke in public and at times appeared to regret the very public life she has led.
"I had never expected or aspired to be a Supreme Court justice. My first year on the court made me long at times for obscurity," the AP quoted her as once saying.