Daley, 68, got choked up a couple of times while he made the announcement. He said that he had been thinking about not running for several months, and became comfortable with the decision over the past several weeks.
"It just feels right," Daley said at a news conference Tuesday. "I've always believed that every person, especially public officials, must understand when it's time to move on. For me that time is now."
There was little notice before he announced his decision. Reporters were notified of the press conference about an hour before it was held, and were told that a major cabinet announcement would be forthcoming. His actual announcement surprised almost everyone.
"It's a surprise because there's been a Daley in the political system for so long," said Alan Gitelson, a Loyola University of Chicago political science professor. "There's always been this presence. It's been really part and parcel, part of the identity of the city to have a Daley in the mayor's office."
Until Tuesday, Daley had refused to say whether he would run again, fueling speculation that he might not. Daley has presided over Chicago for 21 years.
"To all the Chicagoans who have worked with me to confront our challenges, improve people's lives and make this city stronger, I thank you," the mayor said via Twitter Tuesday afternoon.
Daley held his press conference on the 5th floor at City Hall at around 1:30 p.m. He made the announcement in a speech that lasted about one-and-a-half minutes.
Daley's wife Maggie, who has battled bone cancer, stood by her husband on a crutch as he made his announcement. Some of Daley's adult children and their spouses were there as well. Chicago's first lady seemed to be at peace with the decision, as did the mayor.
The Democrat has been Chicago's mayor since 1989. Daley called the announcement "a personal decision, no more, no less" and said he and his family now begin "new phase of our lives."
After the press conference, the mayor's cabinet was summoned to a meeting on City Hall's eleventh floor. In a switch, the bureaucrats heard the news after reporters and the public.
"[Daley was] a mayor for the people," said Business Affairs and Consumer Protection Commissioner Norma Reyes. "He told the public before he came and told us."
"He's just given so much to the city that I think we all should be grateful and appreciative," said Aviation Commissioner Rosemarie Andolino. "I know I am, of what he taught me, and I'm just honored to have been able to work for the city."
Tuesday night, Daley described a call he received from President Barack Obama congratulating him on his tenure.
Daley said that Obama "said I did a wonderful job; this city's a global city - he's very proud of the city and very proud of the 21 years that we've accomplished, especially in education."
Former Illinois governor Jim Thompson praised the mayor's career.
"You look back over the 21 years and Rich Daley has been a great mayor. He has literally transformed the city of Chicago," said Thompson. "No subsequent mayor will ever acquire the power that Mayor Daley has exercised, like his father before him."
Some city officials also expressed esteem for the mayor and said they understand his decision.
"It is a sad day that someone of his stature has decided to end his contribution and has decided that it is time to move on, but it's understandable," said school board president Mary Richardson-Lowry. "He's done an extraordinary job."
"He's been just a fantastic mayor, a fantastic leader, a wonderful boss and I know everybody in Chicago is going to miss him, but we'll all work to make a transition very smooth and orderly," said Chicago Corporation counsel Mara Georges.
Daley spent the morning before making his announcement ringing a bell at a ceremony to open the year for the Chicago Public Schools.
The past 12 months have been the most difficult of Daley's twenty years in office. The city lost its bid for the 2016 Olympics, its budget deficit swelled to more than $650 million, his wife's cancer flared, and his job approval rating sank to 37% in a Chicago Tribune survey.
On Tuesday night, the mayor said he will not endorse any candidate in the 2011 city election.
He had this advice for his successor: "You have to have a passion, you have to have passion for government. Otherwise, government becomes too bureaucratic and people don't like it."
Daley was elected to the state Senate in 1972 and as Cook County State's Attorney in 1980. He became Chicago mayor in 1989 when he won a special election after the death of Mayor Harold Washington.
Upon his election, Daley followed in the footsteps of his father, Richard J. Daley, who died of a heart attack while still mayor in 1976 at age 74.
On December 26, 2010, Daley will surpass the record of his father and becoming the longest-serving mayor in Chicago history. Daley's term does next expire until Spring 2011.
Leaders react to stunning announcement
President Barack Obama reacted Tuesday to Mayor Daley's announcement that he would not seek re-election. In a statement, Obama said: "No mayor in America has loved a city more or served a community with greater passion than Rich Daley. He helped build Chicago's image as a world class city, and leaves a legacy of progress that will be appreciated for generations to come."
Cook County Clerk David Orr says the political landscape in Chicago "changes enormously" after Mayor Richard Daley's announcement that he won't run for reelection.
Orr told WBBM radio on Tuesday that now "many political people will be focused on the mayor's seat." Orr says there's going to be much "scheming and planning."
Gov. Pat Quinn says he was shocked by Richard Daley's announcement that he wouldn't run for a seventh term as Chicago mayor in next year's city election. Quinn praised Daley on Tuesday as a "great guy" and a "great mayor."
The governor says he wishes Daley and his wife, Maggie, "nothing but the best."
Quinn says he thinks Daley and his wife "are the heart of Chicago." He says the Daleys love Chicago and have "servants' hearts."
Quinn says he has no clue about what was behind Daley's decision.
The Rev. Jesse Jackson says Mayor Richard Daley's job has grown increasingly difficult with the bad economy and violence in the city.
Like others, the civil rights leader says he was shocked by Daley's sudden announcement Tuesday that he would not seek a seventh term. He speculates the city's losing bid for the 2016 Olympics and high-profile episodes of violence in the city weighed on Daley's decision.
Jackson called Daley a coalition builder but said the mayor's focus had been on downtown development instead of neighborhood development.
U.S. Sen. Dick Durbin says Mayor Richard Daley and his family have put their "hearts and souls" into the city of Chicago. Durbin also says being a big-city mayor is a tough job. The senator says an energized, attractive Chicago "tells the story of Mayor Daley's record."
The Associated Press contributed to this report.