He made his announcement at the end of his presidential address to the Church of Ireland synod in Armagh yesterday.
Dr Eames, who is 69, has been Archbishop of Armagh for almost 20 years. He said he would be formally retiring on December 31.
He told the synod: “I have decided after much prayer, thought and discussion with those I love that I should retire from my position of Archbishop of Armagh and Primate of All Ireland.
“Accordingly, I will be informing the House of Bishops next October of my wish to retire on the 31st December of this year. I am announcing my intentions today as this will be the last occasion I preside over the General Synod of the Church of Ireland.”
Dr Eames said it had been a privilege beyond words to serve the church.
“Among those lasting memories will be, of course, the dark years of the Troubles in this part of Ireland when I saw the heights of compassion and nobility as well as the weakness and evil of human character,” the archbishop added.
Archbishop of Dublin, Dr John Neill, is expected to be the front-runner to assume the primacy.
Ulster Unionist deputy leader Danny Kennedy led tributes to Dr Eames, describing him as a rock of decency and common sense and a respected ambassador for the North.
“During the years in which our society suffered the onslaught of terrorism, Dr Eames spoke out with clarity and courage against the evil of terrorist violence, and — away from the media’s attention — comforted those who lost loved ones during the Troubles,” Mr Kennedy said.
President Mary McAleese wished the Church of Ireland Primate well, noting he had been a strong and insistent advocate of tolerance and respect for others throughout his ministry.