Emanuel, 58, announced at a City Hall press conference that he will not seek re-election at the end of his term. Chicago's mayoral election will take place on Feb. 26, 2019.
"Today, the time has come to make another tough choice. As much as I love this job, and will always love this city and its residents, I've decided not to seek re-election," he said.
Emanuel made the announcement with his wife Amy Rule by his side.
WATCH: Mayor Emanuel announces he will not seek re-election
"This has been the job of a lifetime, but it is not a job for a lifetime. You hire us to get things done, and pass the torch when we've done our best to do what you hired us to do," he added.
Emanuel was visibly emotional during the announcement.
WATCH: Emanuel thanks grandfather for coming to US, Chicago for electing him
He spoke about what he feels have been his accomplishments over the last seven and a half years: improving schools and transportation systems, and trying to rebuild trust between police and the community. But he has also battled a resurgence in violence this summer.
"For the last seven and a half years I have given my all every day, and left everything on the field. This commitment has required significant sacrifice all around," he said.
The mayor did not take any questions at the conclusion of his remarks and did not say if he supported any one candidate in the mayoral race. He did not offer any endorsements. There are at least 12 candidates currently running for mayor. But he suggested the decision was personal, not political.
"Politicians always say they're going to leave public office to spend more time with their family. My children were smart enough to see that coming and they have scattered to the two coasts, so as of the other day we are empty nesters," Emanuel joked. "Amy and I are still young and Amy still looks it. We look forward to writing the next chapter of our journey together."
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Political strategist David Axelrod, who is one of Emanuel's closest friends, said he was not surprised by the announcement, and that the mayor had been mulling this decision for months.
"He knew he'd have a tough race but was confident about winning that race, but the part that was nagging at him, and that he kept coming back to, was do I have-I love this job but do I have another four years in me doing it the way I want to do it," he said.
Emanuel's decision leaves the candidate field wide open, analysts said, and drastically changes the landscape of next year's election.
"The first thing they have to do is rethink their strategy, their political strategy for their campaigns, because to a person they've all been running against Rahm, they've been running to say that the mayor is not doing a great job, that they can do a better job, well they don't have anybody to run against in that sense," said Laura Washington, ABC7 Legal Analyst.
As recently as last week, the mayor was noncommittal when asked about whether he was running for reelection. According to the State Board of Elections, he had more than $8 million cash on hand as of June.
The announcement came the day before the start of one of the biggest police-shooting trials in the history of Chicago - the murder trial of police officer Jason Van Dyke. The release of a dashcam video two years ago of the white officer shooting black teenager Laquan McDonald 16 times in 2014 drew the sharpest criticism of Emanuel in his two terms as mayor.
Axelrod said the trial was not a significant factor in the decision. It really was personal.
"And one that he went back and forth on for a long time, really agonized over it because it's hard to walk away from a job you love. But it's also true in this business people rarely make the mistake of leaving. It's rarely a mistake to leave too soon, it's often a mistake to try and stay too long," Axelrod said.
Emanuel grew up in the ritzy Chicago suburb of Wilmette, the son of an Israeli physician who moved to the United States. His start in politics came after college, when he worked for Sen. Paul Simon's 1984 Senate campaign and Richard Daley's run for Chicago mayor in 1989.
Emanuel is the 55th mayor of the city of Chicago and has served in the position since 2011. He followed Richard M. Daley, who was mayor for more than 20 years. Emanuel was a member of the Clinton administration from 1993 to 1998, eventually serving as Senior Advisor for Policy and Strategy. He served three terms as the U.S. Representative for Illinois' 5th District, and then served as White House Chief of Staff to President Obama for part of his first term.
For three hours today, WVON attempted to break down Emanuel's political bombshell. The news made waves around Chicago from every day citizens to community leaders left wondering what led to the mayor's decision, and who will fill the inevitable power vacuum in a city whose politics have nearly always been dominated by deep-pocketed incumbents.
"We know that our mayor has been controversial and certainly a question is what legacy does he leave behind?" said Sylvia Puente, Latino Policy Forum. "His announcement comes on the heels of the Laquan McDonald trial that is about to begin leaves any astute observer questioning what is it that we don't yet know?"
"We have to be very clear now to say, OK, it's a different race now. It's a different agenda now. But here's what's not different: the West and the South Side, equalizing the playing field. Housing, jobs. Education that's good in every school," said Father Michael Pfleger, St. Sabina Catholic Church.
At City Hall, both the mayor's political allies and erstwhile critics also reacted. Many wondered aloud who will add their names to an already crowded field of candidates. And at least one, retiring 22nd Ward Alderman Ricardo Munoz, is now reconsidering his recent decision to withdraw from public life.
"I'm considering it. Like I said, a comet has hit this morning and I'm considering running for mayor," Munoz said.
"I don't blame him. It's a tough job and he's been getting a lot of heat. People going to his house. The city is improved but we're in a different era right now," said 25th Ward Alderman Danny Solis.
ALLIES, ADVERSARIES AND FORMER PRESIDENTS REACT TO EMANUEL ANNOUNCEMENT
Cook County Board President Toni Preckwinkle released a statement, saying, "I was surprised by Mayor Emanuel's announcement this morning that he has decided not to seek re-election. I want to thank him for leading our city for the past eight years and also for his service to the nation--his time in Congress and as Chief of Staff to President Obama. Being mayor of the nation's third-largest city is extraordinarily difficult and all-consuming. I wish him and Amy well in their future endeavors."
Comptroller Suzanna Mendoza released a statement thanking him for his service and saying, in part, "Mayor Emanuel and I had some lively arguments when I first took office as City Clerk. But we respected each other's work ethic and were united by our mutual love for the City and the people of Chicago. He made tough choices that needed to be made and I admire his conviction and force of will that drove him to see many projects through for the good of Chicago."
Former President Barack Obama released a statement saying, in part, "I've been blessed to call Rahm my friend. Whatever he chooses to do next, I know he'll continue to make a positive difference, just as he has throughout his career in public service. And Michelle and I wish Rahm and Amy all the best as they consider this next phase in their lives."
Former President Bill Clinton released a statement saying, in part, "Chicagoans were wise to pick Rahm Emanuel when they did. Now they must choose wisely again. Someone to continue addressing the challenges, maintain the strengths, and bridge the divides."
WATCH: Rev. Gregory Livingston speaks on Emanuel's choice not to seek re-election
Emma Tai, executive director of United Working Families, released a statement saying in part, "With Emanuel gone, we can and we will win a different future--a city for the many, not just the wealthy few. The people of Chicago need and deserve public safety without occupation, living wage jobs, and flourishing public schools."
Chicago Teachers Union Acting President Jesse Sharkey said in a press conference, "We're happy to hear that news mainly for what it means for the future of education and schools in our city."
He called the announcement a victory for the union, attributing it mostly to the hard work by former CTU president Karen Lewis. Sharkey sharply criticized Emanuel, calling his record on schools a "disaster." He renewed the union's calls for more school funding, more support for neighborhood schools and an elected school board.
BREAKING: Mayor #RahmEmanuel NOT running for re-election. He gave no indication announcement was coming. Sources tell me his staff found out after this event at city hall. The mayor saying he made the decision over the weekend with his wife. @ABC7Chicago pic.twitter.com/pG6HFK2lRt— Jessica D'Onofrio (@donofrioABC7) September 4, 2018
Illinois House Speaker Michael Madigan released a statement thanking Emanuel for his service, saying in part, "Mayor Emanuel offered steady leadership through difficult times. His efforts to balance the budget, stabilize pensions, and make tough decisions consistently reflected his commitment to do what was best for the future of our city, not what was easy. As Chicago continues to move forward and grow as an international city, we will remain grateful for Mayor Emanuel's leadership."
Illinois Senate President John Cullerton released a statement, saying, "Rahm Emanuel has been a tireless advocate for the City of Chicago. His commitment to education will be felt for generations to come, as will his positive influence on our great city. I'm honored to have worked with him and proud to call him my friend. I wish him and his family the best in their next adventures."
Democratic candidate for governor JB Pritzker released a statement, saying in part, "Every elected official makes personal sacrifice to do this work and Mayor Emanuel honored the legacy of his family with his service to our city and our state. Illinois faces real challenges, and should I be elected governor, I look forward to working with the mayor in his final months in office and with new leadership to move our state forward."
The Associated Press contributed to this report.