Alex Ferguson will retire as Manchester United manager at the end of the season in the 27th year of a tenure that has made him the most successful in British football.

While he will become a United director and ambassador, the executive are now charged with having to appoint the successor to a man who has won 13 league titles, two Champions Leagues, the Cup Winners’ Cup, five FA Cups and four League Cups. In February, Ed Woodward, the incoming chief executive, said there was plan in place for when the Scot did step down.

Regarding his decision, Ferguson said: “The decision to retire is one that I have thought a great deal about and one that I have not taken lightly. It is the right time. It was important to me to leave an organisation in the strongest possible shape and I believe I have done so. The quality of this league winning squad, and the balance of ages within it, bodes well for continued success at the highest level whilst the structure of the youth set-up will ensure that the long- term future of the club remains a bright one.

“Our training facilities are amongst the finest in global sport and our home Old Trafford is rightfully regarded as one of the leading venues in the world. Going forward, I am delighted to take on the roles of both director and ambassador for the club. With these activities, along with my many other interests, I am looking forward to the future. I must pay tribute to my family, their love and support has been essential. My wife Cathy has been the key figure throughout my career, providing a bedrock of both stability and encouragement. Words are not enough to express what this has meant to me.

“As for my players and staff, past and present, I would like to thank them all for a staggering level of professional conduct and dedication that has helped to deliver so many memorable triumphs. Without their contribution the history of this great club would not be as rich. In my early years, the backing of the board, and Bobby Charlton in particular, gave me the confidence and time to build a football club, rather than just a football team.

“Over the past decade, the Glazer family have provided me with the platform to manage Manchester United to the best of my ability and I have been extremely fortunate to have worked with a talented and trustworthy chief executive in David Gill. I am truly grateful to all of them.

“To the fans, thank you. The support you have provided over the years has been truly humbling. It has been an honour and an enormous privilege to have had the opportunity to lead your club and I have treasured my time as manager of Manchester United.”

The sudden nature of Ferguson’s departure is in keeping with how the Scot stated he would leave the post after he trailed a first retirement during the 2001/2 season before performing a U-turn. However, earlier this year Woodward, who will replace David Gill as chief executive in the summer, said: “We have a view as to what that process [appointing a new manager] will look like in terms of finding a replacement and what type of manager we want and how and when we’ll go about it. But it’s in the drawer and long may it stay in the drawer.”

It is understood that any successor to the Scot would be required by the club to have extended experience of managing in the Champions League, as well as expertise in handling a large budget and squad. These criteria would appear to rule out David Moyes, the Everton manager, with at least one senior executive unsure about his candidacy, despite Ferguson being an admirer – though earlier in the week bookmakers slashed the odds on him joining United, possibly as member of the backroom staff, this summer.

Other managers who may be of interest to United would include Real Madrid's José Mourinho, though he appears favourite to take over at Chelsea, Jurgen Klopp, whose Borussia Dortmund team are in the Champions League final, and Malaga's Manuel Pellegrini.

Ferguson will be a strong voice in any replacement for him and whether he would endorse Mourhino is unclear. When Charlton, a United director and one of those instrumental in bringing Ferguson to the club from Aberdeen in 1986, was asked last year if the Scot admired the Portuguese, he said: "He doesn't like him too much, though."

It is thought that Mourinho’s histrionics and the temporary nature of his career in which he has consistently moved around clubs is not considered desirable by United. However, he has claimed league titles in Portugal, England, Italy and Spain and has twice won the Champions League – the same count as Ferguson.

While United will be keen to replace Ferguson as soon as possible, the club will not be rushed with the ideal scenario being that the next manager should be appointed before the three week summer tour to Australia, Japan and the Far East in early July.

Joel Glazer, joint chairman of the Manchester United board, said: “Alex has proven time and time again what a fantastic manager he is but he’s also a wonderful person. His determination to succeed and dedication to the club have been truly remarkable. I will always cherish the wonderful memories he has given us, like that magical night in Moscow.

Avie Glazer, his brother, said: “I am delighted to announce that Alex has agreed to stay with the club as a director. His contributions to Manchester United over the last 26 years have been extraordinary and, like all United fans, I want him to be a part of its future.”

David Gill the outgoing chief exectutive, said: “I’ve had the tremendous pleasure of working very closely with Alex for 16 unforgettable years – through the treble, the double, countless trophy wins and numerous signings.

“We knew that his retirement would come one day and we both have been planning for it by ensuring the quality of the squad and club structures are in first class condition.

“Alex’s vision, energy and ability have built teams – both on and off the pitch – that his successor can count on as among the best and most loyal in world sport.

“The way he cares for this club, his staff and for the football family in general is something that I admire. It is a side to him that is often hidden from public view but it is something that I have been privileged to witness in the last 16 years.

“What he has done for this club and for the game in general will never be forgotten. It has been the greatest experience of my working life being alongside Alex and a great honour to be able to call him a friend.”

Guardian