Mixed reaction as Castro says goodbye
Socialist presidents in Latin American, including Venezuela's Hugo Chavez, have praised his achievements and said they respect his decision to retire.
George Bush welcomed Castro's announcement saying it should be the turning point in Cuba's transition to democratic rule.
America's Democratic presidential candidates Barak Obama and Hillary Clinton have suggested that the U.S. may lift the 50-year-old embargo on Cuba if they take office in November's election.
Meanwhile, the Republican front-runner John McCain said the U.S. should keep the pressure on.
Castro had been in the post since 1976.
The National Assembly is now expected to nominate his brother Raul as leader at the weekend. Raul Castro has been de-facto head of state since his brother underwent intestinal surgery a year and a half ago.
Sergey Brilev, an expert on Latin America, says that whatever changes Cuba experiences, power will stay within Castro's circle.
“I think there will be a lot of changes and Cuba will inevitably have to pass through what Russia did in the 1990s. But at the same time Fidel has guaranteed that the power on this island will stay in the hands of the Cubans, communists or non-communists, but they will be from the circle of Fidel and Raul Castro,” predicted Mr Brilev.