Dr Rowan Williams is understood to have told friends he is ready to quit the highest office in the Church of England to pursue a life in academia.
The news will trigger intense plotting behind the scenes over who should succeed the 61-year-old archbishop, who is not required to retire until he is 70.
Bishops have privately been arguing for Dr Williams to stand down, with the Rt Rev Richard Chartres, the Bishop of London, telling clergy he should give someone else a chance after nearly ten years in the post.
Lambeth Palace would not be drawn into confirming or denying whether the archbishop will be leaving next year.
A spokesman would only say: "We would never comment on this matter."
Sources close to the archbishop say he will leave after the Queen's Diamond Jubilee next June and having seen the Church finally pass legislation to allow women to become bishops.
It is understood that Trinity College, Cambridge, is preparing to create a professorship for Dr Williams, who studied theology and was a chaplain at the university.
After presiding over one of the most turbulent periods in the Church's history, the archbishop has told friends he would like to give his successor adequate time to prepare for the next Lambeth Conference – the summit of Anglican bishops held once every decade.
He is even said to have considered quitting following the last conference in 2008, which was mired by boycotts, rows over homosexual clergy and challenges to the Archbishop of Canterbury's authority.
A friend of Dr Williams said he had continued as archbishop because he was determined to navigate the Church through some of its most testing times, including passing historic reforms to create women bishops.
"Rowan is not a quitter, and has never given up on keeping the [Anglican] communion together despite the endless reports of schism," they said.
"However, he has told me that he feels whoever takes over from him needs a good amount of time to settle in before the next Lambeth Conference."
Another well-placed source said Dr Williams plans to take part in the Queen's Diamond Jubilee next year, but will announce his resignation soon after that.
This could allow for John Sentamu, the Archbishop of York, to succeed him in a caretaker role as the Ugandan-born cleric is one year older than the Archbishop of Canterbury.
Bishop Chartres has been telling clergy that such a move could be beneficial for the Church, though the Bishop of London would also be one of the front-runners himself.
"Richard has been saying it's time for Rowan to stand down so that Sentamu can take over, but can't have forgotten that he's the same age as Sentamu. He would have just as good a chance of becoming archbishop given his connection with the royal family, but the only problem is his opposition to women's ordination."
Next year will mark the tenth anniversary of Dr Williams's promotion to Canterbury, which would represent a similar period in office to his predecessor, Lord Carey of Clifton.
His reign has been plagued by bitter rows over gay clergy and women bishops that have left him struggling to prevent the Church from unravelling, particularly following the Roman Catholic Church's offer to accept disillusioned Anglicans.
Over the last year however, he has been less preoccupied with internal ecclesiastical disputes and has become increasingly outspoken on political issues, opposing Government plans to sell off publicly owned forests and then attacking the Coalition's education and welfare reforms.