In recent weeks, a jovial Tutu appeared at several World Cup events. He gave a speech to thunderous applause at the tournament's opening concert and was also seen dancing in his seat at the VIP section at the opening ceremony.
It is Tutu who labeled South Africa the "rainbow nation of God" to celebrate its diverse cultures.
He received the Nobel Peace Prize in 1984, and then used his new international stature to step up the campaign against apartheid.
Tutu led calls for punitive sanctions against South Africa, remaining one of the few strong voices inside the country while other activists were imprisoned or forced to operate abroad.
He was ever-present during the turbulent final years of apartheid and the ensuing transition to majority rule, praying and sermonising after massacres and then heading the Truth and Reconciliation Commission.
For more than two years the panel listened to people testifying about torture, killings and other atrocities during the apartheid era.
Former South African president Nelson Mandela made a similar decision to largely retire from public life back in 2004.
Tutu said once he steps down, he will no longer be available for media interviews and new appointments will not be added to his schedule.
He said, though, that he would stay involved with the Nobel Laureate Group and a group of international statesmen and women brought together by Mandela known as the Elders. Tutu also will remain involved in the Desmond Tutu Peace Center in Cape Town.
Tutu said on Thursday he contributed “in a small way to the development of our new democratic, exhilarating, exasperating nation.
"Thank you to my colleagues, past and present, for doing all the work and allowing me to take the credit,” he said.
Tutu is one of South Africa's most beloved figures, a burst of energy less than 5 feet 5 inches (1.65 m) tall who could inspire somber crowds to cheerful chants or wade into angry mobs to prevent violence.
While his role as a churchman provided some protection from the apartheid-era security police, Tutu was arrested repeatedly before South Africa's first all race elections in 1994.
His passport was confiscated several times. He promoted peace and rejected violence by the African National Congress and other anti-apartheid groups.
The ANC swept to power in the 1994 elections and Mandela, fondly known as Madiba, became the nation's first black president.
"As Madiba said on his retirement: Don't call me; I'll call you," Tutu told journalists on Thursday.
Tutu had questioned the leadership qualities of South African President Jacob Zuma, who bounced back from rape and bribery accusations to win elections in 2009.
Tutu later ended the rift with Zuma by praising Zuma's openness and commending his "African style of leadership."
Tutu has also been an outspoken critic of Zimbabwe President Robert Mugabe and has called for his ouster.