The veteran host says he is leaving in December to take up a new role at the Nine Network.
"Contrary to a lot of reports, it's entirely my decision. In fact, the management has attempted to convince me to stay, for which I'm very grateful," Mitchell told listeners on Friday.
"It's not an easy decision. I love this job. Apart from my family, journalism has been my life."
Mitchell has hosted the program since 1990, dominating the ratings.
He was previously an executive at The Age newspaper and editor of The Herald.
The 71-year-old said he would leave the position to host a weekly podcast, present regular radio slots and provide commentary.
"It's time to go. It's time to do something else," Mitchell said.
"It'll hurt when I finally turn off the daily microphone on Friday, December 1.
"It'll hurt, but it's unquestionably the right thing and I'm really looking forward to a different role next year."
The announcement comes a day after Melbourne rival Virginia Trioli announced she would be leaving ABC Radio's Mornings program due to family illness and to work on a TV arts program.
On Friday, it was revealed Drive host Rafael Epstein would take over the program from mid September and Ali Moore was announced as his replacement.
Victorian opposition leader John Pesutto said the departure of Mr Mitchell and Ms Trioli was a big loss for media and politics in Victoria.
"What happens on 3AW and ABC Melbourne shape debate in many ways and Neil Mitchell and Virginia Trioli have been a part of that, I have enormous fondness for both and respect for both," he said.
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