Mr. Cameron, who resigned as prime minister after June's EU referendum, said he did not want to be a "distraction" for new PM Theresa May.
He had said he would continue as an MP until the next general election.
The 49-year-old, who has represented Witney since 2001, became Conservative leader in 2005 and PM in 2010.
Speaking in his constituency, he said it had been a "great honour" to be an MP for the area, but said it would be difficult for him to remain on the backbenches without becoming "a big distraction and a big diversion" from the work of the new government.
He denied his announcement was related to the government's moves towards allowing new grammar schools, a policy he rejected as PM.
He said the timing - which came after a period of reflection over the summer - was coincidental, adding that there were "many good things" in the proposed education reforms.
He said Mrs. May - his former home secretary - had been "very understanding" when he told her of his decision, saying she had "got off to a cracking start" as prime minister.
Asked about his legacy, and whether he would be remembered as the prime minister that took the UK out of the European Union, he said he hoped his tenure would be recalled for a strong economy and "important social reforms" and that he had transformed a Conservative Party that was "in the doldrums" into a "modernising force".
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