Sir Stephen, a former divisional commander in Bradford for West Yorkshire Police, brought forward his departure from 2016 to the end of this year amid growing criticism of the force.
A number of high-profile incidents - the death of a Kirkcaldy man in custody and the failure to respond to a fatal road crash - have recently led to calls for Sir Stephen to resign.
He had previously indicated he would not seek another police job when his contract ends next year and told a meeting of the Scottish Police Authority (SPA) in Stirling that he will stand down at the start of December.
Sir Stephen said today that the “time was right to take up new challenges” after 35 years with the police and thanked SPA chairman Vic Emery and former justice secretary Kenny MacAskill for their support when tasked with merging eight Scottish forces to form Police Scotland.
He said: “There remains a lot to do, but knowing as I do the quality of our officers and staff I’m confident that the challenges will be met. The dedication and commitment of our people, I think you find out as you learn more about policing, is truly outstanding and I know it will serve Scotland well in the future under a new chief constable.”
The former Strathclyde chief constable added: “I’d like to take the opportunity also to pay proper tribute to the men and women of Police Scotland who deserve all the recognition and who deserve recognition from the public for all that they do.
“I’m immensely proud to be the first chief constable of Police Scotland and to lead the men and women in it, but for me the time has come to move on, to take up new opportunities.”
During his police career, Sir Stephen joined West Yorkshire Police as a Superintendent in 1994. He later served as Divisional Commander in Bradford city centre before joining Staffordshire Police as Assistant Chief Constable in 1998.
Police Scotland has faced a number of controversies since it came into being in 2013. The large-scale use of consensual stop-and-search came under intense scrutiny last year and independent investigators were called in following the M9 collision in July in which Lamara Bell, 25, and John Yuill, 28, died.
The couple spent three days in their crashed car after a call to police was not properly logged.
Officers are also being investigated by the Police Investigations and Review Commissioner over the death of 31-year-old Sheku Bayoh in custody.
Referring to the cases at the SPA meeting, Sir Stephen said: “I also want to give my sincere commitment that where mistakes have been made, we will learn from those mistakes, and any recommendations which will improve the performance of Police Scotland in relation to incidents like this will be taken on board without question.”
First Minister Nicola Sturgeon gave thanks for his years of service and said strong policing has ensured recorded crime is at a 40-year low.
Ms Sturgeon said: “Sir Stephen provided leadership at a crucial time and his strong focus on tackling violent crime made a major contribution to that achievement. I also recognise his powerful and long-standing focus on tackling domestic violence and sexual crime.
“At a time when we are celebrating a century of women in policing, his track record in encouraging and supporting women in the service should also be recognised.
“The policing of major events when Scotland was in the international spotlight such as last year’s Commonwealth Games and the Ryder Cup was also exemplary.
“Reform of policing in Scotland was absolutely vital to sustain the policing upon which Scotland’s communities depend and Sir Stephen’s contribution to that was invaluable.”