Stewart, 52, who has starred on the show since 1999, said he had no specific plans for his next career move, but was thankful for the opportunity to host the program.
"It's been an absolute privilege," said an emotional Stewart. "It's been the honor of my professional life, and I thank you for watching it, for hate-watching it, whatever reason you are tuning in for."
The announcement came after Comedy Central's other big name, former "Daily Show" contributor Stephen Colbert, ended his tenure as star of companion show "The Colbert Report" and left the network in December to succeed the retiring David Letterman as host of the "Late Show" on CBS.
The New York-based "The Daily Show," which airs weeknights at 11 p.m. on the Viacom Inc-owned Comedy Central, is expected to continue, the network said, but a replacement for Stewart has yet to be named.
"Through his unique voice and vision, 'The Daily Show' has become a cultural touchstone for millions of fans and an unparalleled platform for political comedy that will endure for years to come," Comedy Central President Michele Ganeless said in a statement.
Stewart replaced Craig Kilborn roughly 15 years ago as host of the late-night cable program, which has won Peabody and Emmy awards.
"17 years is the longest I have ever in my life held a job, by 16 years and five months," Stewart said on Tuesday's broadcast.
"The upshot there being I am a terrible employee. But in my heart, I know it is time for someone else to have that opportunity," he added, prompting boos from the audience.
"The Daily Show" averages slightly more than 1 million viewers a night, a far smaller audience than his late-night competition on broadcast networks, but Stewart became disproportionately influential in U.S. politics and culture.
His lampooning of elected and would-be office-holders, broadcast journalists and other public figures, especially on the conservative end of the spectrum, has made him a darling of the political left.
Young adult viewers form the core of his fan base. In a 2004 poll by the Pew Research Center for the People and the Press, 21 percent of respondents aged 18 to 29 cited "The Daily Show" as a regular source of political news.
A two-time Oscar host who has branched out into the movie industry, Stewart made his directorial debut with the film "Rosewater" last year.
Beginning his show business career in stand-up comedy in New York, Stewart took his satirical humor to MTV in 1993, where he hosted "The Jon Stewart Show."
"The Daily Show" has been a launchpad for several comedians besides Colbert, among them Steve Carell and John Oliver. -- Reuters
