"This is not the end of anything, but rather the beginning of a two-year mission to pass new gun safety laws, protect children from toxic chemicals, and create more opportunities for working families in New Jersey," Lautenberg said in a statement.
President Barack Obama called Lautenberg "a steadfast champion of the people of New Jersey."
"Throughout his time in the Senate, Frank has fought tirelessly for workers, veterans, members of our military and their families, and immigrants, and he continues to make extraordinary contributions to our nation's safety, and the health and welfare of our citizens," he said in a statement.
The senator has been a staunch advocate of gun control and public infrastructure and a champion of the Amtrak railroad system.
Lautenberg, who turned 89 last month and is the Senate's last veteran of World War II, was facing growing pressure to step down. Though he has been easily elected five times in a state that has not sent a Republican to the Senate in 40 years, he was facing a likely Democratic primary challenge from charismatic Newark Mayor Cory Booker. No Republicans have publicly expressed interest in the seat.
Lautenberg also has had health problems in recent years. He was diagnosed with cancer in 2010 and was successfully treated, and a case of the flu this winter caused him to miss the Senate's Jan. 1 vote on avoiding the fiscal cliff of rising taxes and falling government spending. But he has beaten back health problems before—and a primary opponent who suggested he was too old for the job.
Lautenberg first won election to the Senate in 1982. He was set to travel Friday to his hometown, Paterson, to announce his retirement.
In 2008, Rep. Rob Andrews challenged Lautenberg in a Democratic primary, but Andrews fell well short of unseating him as most of the state's Democratic Party establishment continued to back him. More recently, however, some within the party noted that if he were to die in office, Republican Gov. Chris Christie would get to name a temporary successor.
Lautenberg and Christie have clashed, most famously when the governor scrapped plans for a new rail tunnel under the Hudson River between New Jersey and New York after the senator secured $3 billion in federal grants for the project. More recently, however, the two worked together with other members of the state's Washington delegation to help secure $60.2 billion in aid for the region after Superstorm Sandy, considered the state's worst natural disaster.
Christie said he and Lautenberg have had their differences through the years but "I've always respected him for his tenacity, devotion to the people of New Jersey and his love for and commitment to public service."
Lautenberg was diagnosed in February 2010 with B-cell lymphoma of the stomach and underwent chemotherapy treatments until he was declared in June 2010 to be free of cancer. He worked between the treatments. The diagnosis came just days after the death of Sen. Robert Byrd, D-W.Va., which made Lautenberg the oldest member of the Senate.
Lautenberg got into politics in 1982 after building a fortune as a founder of Automatic Data Processing. In that race, he defeated Republican Rep. Millicent Fenwick, the model for the cartoon character Lacey Davenport in "Doonesbury," while spending $3 million of his own money.
In the Senate, he has been a reliably liberal vote, crusading against smoking and youth drinking and supporting gun control and stiffer environmental laws.
"While I may not be seeking re-election, there is plenty of work to do before the end of this term, and I'm going to keep fighting as hard as ever for the people of New Jersey in the U.S. Senate," Lautenberg said.
This isn't the first time Lautenberg has retired. He decided not to seek re-election in 2000, a move that opened the seat for Jon Corzine, who later served a term as governor. But he was drafted back into politics two years later when scandal-plagued Sen. Robert Torricelli, a Democrat and Lautenberg's longtime rival, abruptly left the race in 2002.
Booker, who has a nettlesome relationship with Lautenberg, issued a statement praising him.
"Sen. Frank Lautenberg has been a champion for the people of New Jersey for decades and his legacy of service will improve the lives of all American's for years to come," Booker said.
Associated Press writers Andrew Taylor in Washington, Katie Zezima in Newark and Geoff Mulvihill in Mount Laurel contributed to this report.