"I have taken the decision to not continue next year as Real Madrid coach", the Frenchman told a hastily convened press conference, before adding he was not looking for another club to coach.
This comes just five days after he won the Champions League with Madrid for a third season in a row.
Speculation about Zidane's long-term future persists and it appears that uncertainty might be addressed as, on Thursday morning, the club posted a website statement which said the boss would speak to the media at 1pm local time (12pm BST).
Zinedine Zidane has confirmed that he will step down as coach of Real Madrid.
He leaves having guided the Spanish club to three successive Champions League titles and one La Liga success since taking over in January 2016. I know it's a odd moment for everyone involved, but I think it's the right decision.
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"This team has to continue winning and has to change, after three years they need a new voice a new way of saying things, perhaps a new way of working".
"I have thought a lot about this decision and I can't go back on it".
"I love this club and the president who gave me the chance to play for this club and manage the club of my dreams".
Madrid's third-place LaLiga finish is likely the major factor in Zidane's departure, as Los Blancos ended the season 17 points adrift of bitter rivals and champions Barcelona.