Powell, who was consistently the most popular cabinet member in President George Bush's first term, handed in his resignation on Friday ahead of a planned trip this month to the Middle East to possibly meet Palestinian leaders.
It was not immediately clear who would replace the former four-star general who failed as the top US diplomat to build a wide international coalition for Bush's invasion of Iraq.
US ambassador to the United Nations John Danforth and Bush's national security adviser Condoleezza Rice are leading candidates to replace Powell, according to Republican party and diplomatic sources.
"The secretary announced to his staff this morning that he had submitted his resignation on Friday. He said he was staying on until a successor is confirmed and on board," a US Department of State official said.
Four senior officials quit
Powell is the highest-level official to quit since Bush won re-election, and one of four cabinet members whose resignations were announced on Monday.
The others were Energy Secretary Spencer Abraham, Education Secretary Rod Paige and Agriculture Secretary Ann Veneman.
Last week Attorney General John Ashcroft and Commerce Secretary Donald Evans resigned. Such turnover of senior officials is not unusual during a transition between administrations.
Powell was generally perceived as resisting the drive to invade Iraq by right-wingers in the Bush administration, who ultimately persuaded the president to launch the first pre-emptive US war.
Rice is a leading candidate to
Aides close to Powell had signalled months ago that he would not stay through a second Bush term and he has not sought to dispel mounting speculation he would leave.
The White House was expected to formally announce his resignation later on Monday, US officials said.
Powell was often seen as representing more moderate views on foreign policy in the Bush administration.
In addition to his work to take the case for a war against Iraq to the United Nations, he pressed for negotiations with North Korea over its suspected nuclear arsenal and has acquiesced on European talks with Iran over its nuclear energy programmes.
Despite his popularity, Powell will be remembered for presenting flawed evidence about Iraq's weapons of mass destruction to the United Nations when he made the case for war on behalf of Bush.