Tipped as the next manager of Manchester City if former Sky Blue Stuart Pearce is relieved of his duties and the next England manager if Steve McLaren is sacked for failing to get England to qualify for the European Championships, Allardyce said the decision to leave the Reebok Stadium was the hardest in his life.
He also said: "It was mutually agreed that I step down now rather than at the end of the season.
"That will give my successor the ideal opportunity to experience the preparation and build up of matchday in readiness of next season.
"The decision to leave the football club, which has been my spiritual home for over 18 years, as both player and manager, is one of the hardest I have had to make in my life.
"After careful consideration and dialogue with my close family and senior officials within the football club, I will be resigning as manager with immediate effect."
"It was mutually agreed that I step down now rather than at the end of the season.
"That will give my successor the ideal opportunity to experience the preparation and build up of matchday in readiness of next season.
"The decision to leave the football club, which has been my spiritual home for over 18 years, as both player and manager, is one of the hardest I have had to make in my life.
"After careful consideration and dialogue with my close family and senior officials within the football club, I will be resigning as manager with immediate effect."