President George Bush announced on Thursday that his director of Central Intelligence (DCI) was resigning for personal reasons after doing "a superb job".
"He has been a strong leader in the War on Terror," said Bush at the White House in Washington. "I will miss him."
Speaking shortly after the president's announcement, Tenet said the decision to leave had been tough and thanked Bush, calling him "a champion" for the intelligence services.
Tenet will officially leave the CIA in mid-July when Deputy Director John McLaughlin is expected to take over temporarily.
Tenet's position as DCI has been under increasingly critical scrutiny for months amid mounting controversy over the quality of US intelligence regarding Saddam Hussein's alleged weapons programmes.
In the run-up to the US-led invasion of Iraq in March 2003, the Bush administration repeatedly claimed its intelligence showed Saddam had active nuclear, biological and chemical weapons programmes.
Those allegations formed the basis of Washington's justification for attacking Iraq to topple Saddam.
But subsequent searches for Iraqi weapons of mass destruction have yielded no evidence of any such weapons or active programmes - suggesting that US intelligence had either been wrong, misinterpreted or manipulated.
Tenet faced tough questions over the quality of his agency's work with respect to Iraq when he was grilled by the Senate Armed Services Committee in March.
Tenet has been criticised for the
CIA's handling of Iraq intelligence
The DCI has also been criticised for being insufficiently prepared before the 11 September 2001 air attacks on the US.
Despite the failure to prevent those attacks and the subsequent death of around 3000 Americans, Tenet kept his job.
In April, Tenet admitted to the bipartisan inquiry investigating the 9/11 attacks that his Central Intelligence Agency (CIA) suffered from systemic problems and had made mistakes prior to the attacks on Washington and New York.
The 9/11 inquiry is due to report its findings in July.
In February, Democratic senator from Michigan Carl Levin accused Tenet of making false statements about Iraq's alleged WMD programme.
Former CIA official Larry Johnson told Aljazeera.net in March that Tenet had a "poor record" as DCI, had grossly mishandled intelligence about Iraq's alleged weapons and should have resigned over the mishandling of Iraqi intelligence.
Tenet became deputy director of Central Intelligence under President Bill Clinton in 1995 and was appointed DCI the following year.
Tenet was initially seen as a stabilising figure in an agency hit by years of scandal and uncertainty. Prior to his appointment, the CIA had five directors in six years.
The agency had also been recovering from various scandals such as the Ames case and other security leaks, as well as numerous allegations of complicity in drug trafficking in the 1980s.
Chalabi lashes out
Beleaguered Iraqi opposition figure, Ahmed Chalabi, lashed out at Tenet upon hearing of the CIA head's resignation.
"He provided erroneous information about weapons of mass destruction to President Bush which caused his government massive embarrassment in the United Nations and his own country."
The State Department and Chalabi
have lately not seen eye-to-eye
Chalabi recently denied a CIA allegation that he had been supplying Iran with sensitive intelligence material.
"Tenet was behind the charges against me, that claimed that
I gave intelligence information to Iran. I denied these charges
and deny them again, and I am sorry that he will not have the chance to appear before Congress now to decide whether this information he provided is correct or not," he said.
"I challenge him to bring the evidence."