According to officials in Washington, her resignation, first disclosed on the congresswoman's Facebook page, is expected to take effect on Monday.
The Democratic congresswoman was shot in the head last January as she was meeting with constituents outside a supermarket in Tucson, Ariz. While her progress has seemed remarkable, she said she has more work to do to recover, and it is best from her state if she resigns her seat in the House.
Her shooting prompted an agonizing national debate about super-charged rhetoric in political campaigns.
In a two-minute video posted to her Facebook page, Giffords says: "I don't remember much from that horrible day, but I will never forget the trust you placed in me to be your voice."
She says, "I'm getting better. Every day my spirit is high. I will return and we will work together for Arizona and this great country."
Under state law, a special election will be called to fill out the remainder of Giffords' term.
In a statement, House Democratic leader Nancy Pelosi of California said that "since the tragic events one year ago, Gabby has been an inspiring symbol of determination and courage to millions of Americans."
Democratic officials had held out hope for months that the congresswoman might recover sufficiently to run for re-election or even become a candidate to replace retiring Republican Sen. Jon Kyl.
Full statement from Giffords:
"Arizona is my home, always will be. A lot has happened over the past year. We need to not change that but I know on the issues we fought for we can change things for the better. We can do so much more by working together. I don't remember much from that horrible day but I will never forget the trust you placed in be to be your voice. Thank you for your prayers and for giving me time to recover. I have more work to do on my recovery and so to do what is best for Arizona I will step down this week I'm getting better every day. My spirit is high. I will return and we will work together for Arizona and this great country."
ABC NEWS contributed to this story.