Jackson time at the helm has included finding a replacement for long-time coach Kevin Sheedy and putting the club in a strong financial position.
"As a leader it is important to recognise when the time is right for change," Jackson said via a statement released by the club on Thursday.
"From the perspective of the football club, and also from a personal point of view, I think that time is now
"Football is a very demanding industry - you don't work in it, you live in it - and that takes a lot of energy. I will always retain a connection with the game, but there are also things away from football that I now wish to focus some of my energies on. I am very comfortable with my decision.
"There is still a lot to be achieved in the coming months and I look forward to continuing to work with the board, management and staff to further strengthen the club's position on and off the field."
The Bombers have continued to strengthen their position as one of the financially stronger clubs in the AFL under Jackson's stewardship which has included eight finals campaigns as well as the 2000 premiership.
Jackson told a full staff meeting of his decision on Tuesday and the players on Thursday.
Essendon chairman Ray Horsburgh will immediately embark on a search for Jackson's successor and he paid tribute to his years of service.
"Peter has done an outstanding job in his time as CEO and managing director of the club," Horsburgh said.
"We are pleased he has agreed to remain in the position until the completion of this season.
"The timing of this announcement will give the club time to put in place the right process to find a replacement who can work with the club's executive and staff to build on the wonderful foundations that have been established under Peter's guidance."
