The German took over at Anfield in November 2015 but he has now decided to call time on his Liverpool career.
Klopp has won the Premier League and Champions League with the Reds and is currently top of the Prem table.
But he revealed he is running out of energy and cannot continue in the job year after year.
Klopp explained his decision to step down in an emotional interview in which he shared his love for the club, the fans and the city.
He said: “I can understand that it’s a shock for a lot of people in this moment, when you hear it for the first time, but obviously I can explain it – or at least try to explain it.
“ I love absolutely everything about this club, I love everything about the city, I love everything about our supporters, I love the team, I love the staff. I love everything. But that I still take this decision shows you that I am convinced it is the one I have to take.
“It is that I am, how can I say it, running out of energy. I have no problem now, obviously, I knew it already for longer that I will have to announce it at one point, but I am absolutely fine now. I know that I cannot do the job again and again and again and again.
“After the years we had together and after all the time we spent together and after all the things we went through together, the respect grew for you, the love grew for you and the least I owe you is the truth – and that is the truth.”
Klopp informed his bosses of his intention to quit last summer.