He said he was not abandoning the Roman Catholic Church.
Pope Benedict, speaking in a strong voice to tens of thousands of people in St Peter's Square, said he would continue to serve and love the church by praying and meditating after his historic abdication on Thursday.
"The Lord is calling me to climb onto the mountain, to dedicate myself even more to prayer and meditation," he said to cheers of "Long Live the Pope".
"But this does not mean abandoning the church. Actually, if God asks this of me, it is precisely because I can continue to serve her with the same dedication and the same love I have shown so far," he said.
But he said he would be serving the Church "in a way more in keeping with my age and my forces".
The address was one of Pope Benedict's last appearances as pontiff.
On Wednesday, he will hold his last general audience in St Peter's Square and on Thursday he will meet with cardinals and then fly to the papal summer retreat south of Rome.
The papacy will become vacant at 8pm Rome time (7pm Irish time) on Thursday.
Cardinals will begin meetings the next day to prepare for a conclave, likely to start in mid-March, where they will elect a new pope from among themselves.