President Bush announced Thursday. Tenet, who weathered political storms over faulty pre-war Iraq intelligence and lapses leading up to the Sept. 11 terrorist attacks, will remain the nation's spy chief until mid-July.
"He's been a strong and able leader at the agency. He's been a strong leader in the war on terror and I will miss him," said the president before boarding Marine One for a trip to Andrews Air Force Base in Maryland and on to Europe.
"I send my blessings to George and his family and look forward to working with him until he leaves the agency," Mr. Bush said.
During Tenet's seven-year tenure at the CIA, there has been periodic speculation about whether he would step down or be forced to leave. After the terror attacks of Sept. 11, 2001 and again after the flawed intelligence estimates about Iraq's military capability, some officials called for his ouster.
A panel investigating the Sept. 11 attacks released statements in May that criticized the CIA for failing to fully appreciate the threat posed by al-Qaida before the terrorist hijackings. Tenet told the panel that intelligence-gathering flaws the attacks exposed will take five years to correct.
Tenet, 51, was appointed CIA director by President Clinton in 1995. Before that, he had served as senior intelligence official on Mr. Clinton's National Security Council.
Massachusetts Sen. John Kerry, Bush's likely Democratic opponent in this fall's elections, said in a statement that Tenet "has worked extremely hard on behalf of our nation."
"There is no question, however, that there have been significant intelligence failures, and the administration has to accept responsibility for those failures," he said.
But FBI Director Robert Mueller, whose agency has also come under fire for pre-9/11 anti-terrorism efforts, praised Tenet's work to reform the nation's security efforts.
"George has sought at every turn to bridge the gap between the CIA and FBI with one goal in mind -- the security of the American public," Mueller said "Due to his constant efforts to bring the intelligence agencies closer together, we are better able to predict the actions of our adversaries and to protect Americans from evolving transnational threats."
Senate Minority Leader Tom Daschle said Tenet's resignation surprised him.
"I don't think anyone saw it coming. I think we need to know more about the reasons why this surprise announcement came today," the South Dakota Democrat said.
"Mr. Tenet's been under very harsh criticism. I think clearly he's been under great pressure and some criticism. Whether or not that's a factor is not something I can comment on," Daschle said.
House Speaker Rep. Dennis Hastert, R-Ill, said of Tenet, "History will tell what the implications of his tenure were. ... It's too early to make that snap judgment. I think history will either vindicate him or say 'hey, there was a problem there."'
When Tenet spoke to CIA employees about his decision, he said, "it was a personal decision, and had only one basis in fact: the well being of my wonderful family, nothing more and nothing less."
After Tenet leaves in mid-July, Deputy CIA Director John McLaughlin will serve as acting director. It is unclear when a permanent replacement will be chosen.