The Frenchman, who was only appointed in January 2016, made the shock announcement at an emergency press conference.
He became the first manager to win the European Cup or Champions League three times in a row, while also landing a La Liga title and five other major honours.
Club president Florentino Perez confirmed Zidane came to see him yesterday to break the "completely shocking" news.
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He also admitted it was a "sad day" for the club, but insisted he "will be back" — a sentiment Zidane later echoed himself.
The French great explained: "I have taken the decision to leave Real Madrid.
"It is a moment in which I need to take a step back. I believe this could needs to carry on winning and needs a change.
"It needs another discourse and a methodology. I really love this club."
However, the former Ballon d'Or winner revealed he is leaving because he feels the club have endured a difficult season in which they finished 17 points behind champions Barcelona in third place.
He admitted he was affected by the booing of the fans and urged supporters to get behind the players even in the more difficult times.
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