The center-left president listed his perceived achievements before confirming that he would not seek a second term in 2017. Hollande was among the least popular presidents in the history of France.
Hollande said his decisions were driven "by the higher calling for the good of the land," while addressing the nation on Thursday.
"I have decided not to be candidate for the presidential election. I wanted to tell you directly," he said in a televised speech."In the months to come, my only duty will be to continue to lead my country."
The president also spoke at length about his achievements since taking the helm in 2012, including the fight against unemployment.
"Results are coming, later than what I would have wanted, but they are there," he said.
Hollande's move marks the first time a French president declined to seek re-election since WWII.
The announcement leaves an opening for a Socialist - possibly Prime Minister Manuel Valls - to run in 2017 presidential elections.
Fillon, Le Pen await challenger
Once a Socialist candidate is chosen, their main rivals in the vote will likely be center-right Republican candidate Francois Fillon and far-right Front National candidate Marine Le Pen. Hollande had been polling well behind both of these candidates, as he consistently returned record low approval ratings for a French head of state.
On Thursday, Hollande referred to the Republicans' candidate Fillon, who has vowed to cut taxes and relax labor laws.
"I respect this person and his background, but I believe that his project questions and could threaten our social model without any benefit to our economy," Hollande said.
Fillon reacted immediately, saying that Hollande had admitted "with lucidity, that his patent failure prevents him from carrying on any further."
"Those five years [of the Hollande mandate] end in political shambles and decay," he said.
A fragmented left
The president also warned against the dangers of right-wing populism, saying that "all progressive forces must unite," as the "future of the country" was at stake. Hollande's own Socialist party remains deeply divided over the president's policies, with more rivals possible from far-left parties.
"I understand the risk of division my candidacy would cause," the president said.
Former economy minister and Hollande's one-time protege, Emmanuel Macron, has announced his intentions to run as a rival centrist or center-left candidate. The current prime minister Manuel Valls is also expected to run; French media had previously speculated that Valls might quit the government in order to battle Hollande for the Parti Socialiste (PS) nomination.
Valls responded by commending Hollande for his "tough, mature, serious choice" later on Thursday.
He described the decision as "the choice of a statesman."
The first round of elections is scheduled for April next year, with the likely run-off round in May.
dj/msh (AFP, AP, Reuters)