Wojcicki said on Thursday evening she had decided to "step back" and would soon be starting "a new chapter focused on my family, health, and personal projects I'm passionate about".
Neal Mohan, currently YouTube's Chief Product Officer, will be her replacement.
Wojcicki, who is set to remain with the video-sharing giant to assist in the leadership transition, revealed her departure via YouTube's Official Blog. The 54-year-old's message had already been sent to YouTube employees on Thursday morning.
She called joining Google "one of the best decisions of my life", but added that the "time is right" to move on.
Wojcicki leaves unquestionable legacy at YouTube
Back in 1998, soon after Google had become an incorporated business, founders Larry Page and Sergey Brin set up an office in the garage of Wojcicki's home in Menlo Park, California.
Several months later, having seen the potential of the search engine they were building, she joined the team.
Wojcicki, who, in her 20s, had already worked for Intel and Bain & Company, became Google's first marketing manager in 1999 and soon went on to co-create the Google image search alongside engineer Huican Zhu.
She also led Google's first video and book search, as well as early parts of AdSense’s creation.
Crucially, however, Google's video service was competing with a venture capital-funded tech start-up called YouTube – and losing the battle.
And so, as the old saying goes: 'If you can't beat them, buy them'.
Having convinced Page and Brin to purchase YouTube, the acquisition was completed in 2006 for a sum of US$1.65 billion. Today, the company is estimated to be worth as much as US$180bn.
During Wojcicki's tenure as YouTube CEO, the platform hit the milestone of two billion monthly users for the first time, as well as the one billion hours mark for daily video consumption.
Paying tribute to Wojcicki in a statement, Page and Brin said: “Susan has a unique place in Google history and has made the most incredible contribution to products used by people everywhere.
"We’re so grateful for all she’s done over the last 25 years."
Who is incoming YouTube CEO Neal Mohan?
Wojcicki and Neal Mohan have worked closely together since 2007, when Google acquired DoubleClick for US$3.1bn.
"When I joined YouTube nine years ago, one of my first priorities was bringing in an incredible leadership team," said the outgoing CEO in her blog post.
"Neal Mohan was one of those leaders".
Mohan became YouTube's SVP of Display and Video Ads, before progressing to the role of Chief Product Officer in 2015.
Since then, he has played a pivotal role in the launch of YouTube's aforementioned big-name products, while also leading the firm's Trust and Safety team.
"He [Mohan] has a wonderful sense for our product, our business, our creator and user communities, and our employees," added Wojcicki. "Neal will be a terrific leader for YouTube."
Mohan attended Stanford University, graduating with a degree in electrical engineering, before starting work at Accenture.
From 1997, he helped grow the profile of a start-up called Net Gravity, which was itself acquired by DoubleClick.
What next for Susan Wojcicki?
Despite pledging to focus on her family and health, Wojcicki's ties with Google and its own parent company, Alphabet, have not altogether been severed.
She has agreed with CEO Sundar Pichai to take on an advisory role, offering "counsel and guidance" across the Alphabet portfolio of companies.
"It’s an incredibly important time for Google," said Wojcicki.
"It reminds me of the early days – incredible product and technology innovation, huge opportunities and a healthy disregard for the impossible."
"Very grateful for your leadership, insights and friendship over the years, and so happy you're staying on to advise us."