The 36-year-old had led Australia in one day internationals since 2002 and Tests since 2004. He had been under increasing pressure to quit as skipper since an Ashes defeat to England.
"Today I've decided to stand down as captain of the Test team and the one-day team as of now," he told a news conference at the Sydney Cricket Ground (SCG) on Tuesday.
"The main reason for me is I think it's the right time ... I wanted to make sure that I gave the next captain every opportunity I possibly could to make sure he has as much experience going forward in the next couple of big events that we will play."
"I will continue to play and am available for both the one-day and Test teams," he said earlier in a statement.
Michael Clarke, Ponting's deputy, is expected to take over as captain.
Australia, the defending champion, was knocked out of the ongoing World Cup by India. Their unbeaten run of matches in the tournament had earlier been ended by Pakistan in the group stage. Most criticied that use of three quick seamers and inexperienced spinner caused their downfall as most of the pitches suit/ed slow spinners.
Australia will play three one-dayers in Bangladesh next month with trips to Sri Lanka and South Africa scheduled for later.
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