He played a prominent role in South Africa's struggle against the whites-only apartheid system.
After his 79th birthday in October, he said he would reduce his workload to one day a week before retiring.
That work would be devoted to The Elders, a group appointed by former President Nelson Mandela to tackle the world's most pressing problems.
During the 27 years that Mr Mandela was in prison, Archbishop Tutu spoke out against apartheid - and won the Nobel peace prize in 1984 for his efforts.
He was chosen by Mr Mandela to chair South Africa's Truth and Reconciliation Commission and investigate the crimes committed by all sides during the apartheid regime.
'Flavour of the month'The former Archbishop of Cape Town, the first black cleric to hold that position, said his career highlight was introducing Mr Mandela as South African president in 1994.
In a nationally televised news conference from Cape Town, the Anglican cleric described how his schedule had grown more punishing in recent years.
"I have been very, very fortunate to have been given opportunities to contribute in a small way to develop our new, democratic, exhilarating and sometimes exasperating nation," he said. "The time has come to slow down."
He said he wanted to spend more time sipping tea with his wife, watching cricket, or visiting his grandchildren, although he added that he would honour his existing appointments.
Since his retirement as archbishop of Cape Town in 1996, as well as his work with the Elders, the cleric has launched his own peace foundation, advised world leaders and played an active role as a public speaker.
Archbishop Tutu spoke at several events during the recent football World Cup in South Africa, which he described as one of the most important events locally since the end of apartheid.
SIC: BBC