The skipper was re-appointed for a 12-month period in January.
He waited until the end of his media conference on the eve of the first Test against Australia to announce he won't be seeking another stint in the job.
"It's been brilliant," he said.
"I've enjoyed the last year, what I've achieved.
"We need to move on to a younger leader."
Jayawardene has endorsed 25-year-old vice-captain Angelo Mathews as his successor.