Jackson, who has been a judge on the show since its start in 2002, made the announcement amid falling ratings and rampant rumors about the future makeup of the celebrity panel.
"Yo! Yo! Yo! To put all of the speculation to the rest, after 12 years of judging on American Idol I have decided it is time to leave after this season," Jackson told entertainment news outlet E! News.
"I am very proud of how we forever changed television and the music industry. It's been a life changing opportunity but I am looking forward to focusing on my company Dream Merchant 21 and other business ventures," the record producer said.
Entertainment website TheWrap.com reported this week that producers were considering a major shake-up of the panel after the end of the season on May 16.
Citing unidentified sources, TheWrap said singers Mariah Carey, Nicki Minaj and country artist Keith Urban, who were brought in this year in a bid to refresh the show, would all be replaced as judges for the 2014 season.
Fox television declined to comment on the report.
Ratings have slumped this season for "American Idol," which last year lost its eight-year crown as the most-watched show on U.S. television.
Fox is a unit of NewsCorp.
(Reporting By Jill Serjeant; Editing by Xavier Briand)
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