"The decision to retire is one that I have thought a great deal about and one that I have not taken lightly," he said (via ManUtd.com). "It is the right time."
Now it is time to find a successor, and Ferguson—who will now move into a position with the club's board—will likely be involved in the process.
Who will it be? We're breaking down the leading candidates right here.
UPDATE: The Times is reporting that Moyes will be named United's next manager within 24 hours.
Current club: Everton
David Moyes, a 50-year-old Scot, is widely seen as the favorite to succeed Ferguson. The Guardian notes that Moyes ranks among the candidates drawing serious consideration, while the Telegraph writes that Moyes has been the "heir apparent."
Moyes has spent the last 11 seasons at Everton, building the Toffees into top-four contenders in recent years despite working with a limited budget. He has not won a trophy but has experience in the UEFA Cup (now called the Europa League).
What we are looking for is, not someone to come in 10 months or three years, we want someone to come stay there and give stability. When we talk about Moyes, he has been a decade at Everton and done a fantastic job on limited funds.
Current club: Real Madrid
Jose Mourinho currently manages Real Madrid, but he is widely expected to leave the Spanish club this summer. He has been linked heavily with a return to Chelsea, where he managed from 2004 to 2007 and won two Premier League titles.
Mourinho and Ferguson enjoy a friendship off the pitch, and Mourinho is the fans' choice, according to a poll hosted by The Telegraph. The question is whether he has already agreed to join Chelsea, or if United can—or want to—beat their London rivals to him.
Mourinho, 50, has won Champions League titles with Porto and Inter Milan.
Jupp Heynckes, the Bayern Munich manager who is set to retire at the end of the season, is listed as a potential candidate in a poll hosted by The Telegraph. The list also includes names like Michael Laudrup of Swansea, Jurgen Klopp of Borussia Dortmund and Manuel Pellegrini of Malaga.
Heynckes has not previously been linked with United and is, as noted above, set to retire after the current season. The Daily Mirror linked Klopp to United last week, but Klopp has said he will remain with Dortmund next season.
The Guardian linked Laudrup to United last December, but he is nearing the end of only his first season in the Premier League. Pellegrini seems more likely to replace Roberto Mancini at Manchester City than to join United (via Daily Mail).
A number of former United players have been linked with the job, including Laurent Blanc, Ole Gunnar Solskjaer, Gary Neville and even the currently active Ryan Giggs (all listed in Paddy Power odds via Daily Mail).
Of those choices, Blanc would make the most sense. The 47-year-old played briefly for United near the end of his career and has experience managing Bordeaux and the French national team. He is not currently managing a team.
Solskjaer, 40, scored a famous goal for United in the 1999 Champions League final and went into management with the club's reserves in 2008. Since 2011, he has managed Molde in his native Norway, winning two league titles.
Neville has served as an assistant to England manager Roy Hodgson since 2012. Giggs is still active as a player.
Now we wait. United reportedly want to move "relatively quickly" (via The Guardian) on this hire, so we might know the identity of the club's next manager by this weekend.
The smart money is probably on Moyes, who has a track record of building steadily at Everton. He also appears to be a safe candidate, having been in his current job for more than a decade, unlike Mourinho.
Mourinho, however, represents the big-name hire, the glamorous manager who would almost certainly bring success.
Who would you choose to succeed Sir Alex Ferguson? Who is the best man for the job?
Did we leave anyone out?
Let us know in the comments below.