Mr Cameron told the chairman of his Conservative Association and constituency agent before making the announcement, which comes two months after he quit as Prime Minister on July 13 in the wake of defeat in the EU referendum.
The former PM said at the time that he was “very keen to continue” as MP for Witney, which he has represented in the House of Commons since 2001, and said it was “very much my intention” to seek re-election in 2020.
But in a statement, he said: “Having fully considered my position over the summer, I have decided that I am going to stand down as the Member of Parliament for Witney.
“There will now be a by-election and I will do everything that I can to help the Conservative candidate win that election.
“In my view, the circumstances of my resignation as Prime Minister and the realities of modern politics make it very difficult to continue on the backbenches without the risk of becoming a diversion to the important decisions that lie ahead for my successor in Downing Street and the Government.
“I fully support Theresa May and have every confidence that Britain will thrive under her strong leadership.”
Mr Cameron said he would not be moving away from the constituency, where he has made his home with wife Samantha and their children.
He said it had been “an honour” to serve the people of the area for the past 15 years.
“Our house in Dean is the place Samantha, my children and I call home, and that will not change,” said Mr Cameron.
“I will continue to support the local causes and charities that mean so much to me and many others in this beautiful and enterprising part of our country.
“I now look forward to a life outside of Westminster, but hope to continue to play a part in public service and to make a real and useful contribution to the country I love.”