The Welshman had one more year on his contract as assistant manager at the club, but new boss Jose Mourinho is expected to give that role to Rui Faria.
The Old Trafford club had hoped 42-year-old Giggs could be persuaded to stay on in a different role.
But he is bowing out with a trophy haul that includes 13 Premier League titles, two Champions League victories and four FA Cups.
A statement from Manchester United said: "Ryan Giggs is to leave Manchester United, the club he has been with since the age of 14, to pursue his desire to be a manager.""I cannot tell you how much I'll miss walking out at Old Trafford." - Ryan Giggs #GiggsLegend pic.twitter.com/SDlKvp1wVJ— Manchester United (@ManUtd) July 2, 2016
Giggs was an exception in football in that he spent his entire playing career at one club, making a record 963 appearances for the team.
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