In a statement, released this morning, Sants says he only ever intended to stay in the role for a three year term.
Sants was considered to be in the running to become Bank of England deputy governor under a Conservative government, despite his outspoken attack on Tory plans to disband the FSA and pass prudential regulation to the Bank of England.
Sants says: “When I was appointed I told the board that I planned to serve as chief executive for three years and I intend to stick to that timetable.
“Of course, those three years have encompassed the most extraordinary circumstances for a financial regulator and I am very proud of the manner in which the FSA rose to the challenge of dealing with such unprecedented turbulence across global financial markets.
“Moreover, I believe the FSA candidly examined the failings in financial regulation that contributed to the onset of the crisis, learned the lessons and has gone on to reform itself into a much stronger and better equipped organisation.
“The success of any regulatory structure depends on ensuring supervision is carried out by high-quality supervisors with sufficient resources and specialist support.
“I believe the FSA has made great strides in ensuring that such individuals are in place in the UK and I am sure that after I leave they will continue to do invaluable work to ensure financial stability and protect the interests of consumers.”
Chairman Adair Turner says: “Hector has given outstanding service and leadership through the turbulent last three years and has played a pivotal role in reforming the FSA into a truly effective organisation.
“He will leave behind an organisation with strong purpose and a clear strategy. We will be immensely sorry to lose him, but understand his decision to move on in the summer and wish him well in whatever he chooses to do after his departure.
“In the meantime, we will continue to work together to deliver the FSA’s reformed and intensive supervisory approach and drive forward the global regulatory reform agenda.”
The FSA board will announce the process for finding a successor in due course.