In an interview on Monday, Sharon told Haaretz newspaper he had already given the order to plan for the move that would affect 7500 Israeli citizens.
The PM said it was his intention to "carry out an evacuation - sorry, a relocation - of settlements that cause us problems" and of "places that we will not hold onto anyway in a final settlement, like the Gaza settlements".
"I am working on the assumption that in the future there will be no Jews in Gaza."
But in excerpts from the interview, the PM gave no timeframe for the move. "It's not a simple matter. We are talking of thousands of square kilometres of hothouses, factories and packing plants".
"I am working on the assumption that in the future there will be no Jews in Gaza"
Israeli prime minister
Sharon added he hoped to work with settlers rather than removing them by force.
"The first thing is to ask their agreement, to reach an agreement with the residents... it's not a quick matter, especially if it's done under fire."
Sharon has threatened to take unilateral steps to separate from the Palestinians should a US-backed peace "road map" fail.
But it was the first time Sharon had revealed a plan for such a far-reaching withdrawal from territories Israel seized in the 1967 Middle East war, and sparked immediate outrage from settler leaders.
"I am in shock," Likud legislator Yehiel Hazan told Israeli radio in broadcast remarks.
"I think that the prime minister thinks he is the leader not of the Likud but of Labour, Meretz and Shinu," Hazan said, referring to parties with a political agenda to the left of Likud.
Sharon's comments also drew angry protest from settler leaders, but the reaction to Monday's announcement bordered on outrage.
A spokesman for the Gaza settlers called Sharon's statement "miserable" and said Israel's nationalist camp would "make every effort... to cut short Sharon's term as prime minister through legal means".
"We call on Sharon to immediately return to his old, good positions and not to bring another tragedy to the people of Israel through the expulsion of Jews from their homes."