Williams will address the media today, but in a statement released by the school Thursday, he said it was the "right time" for him to step down.
When Williams took over at his alma mater in 1989, the school's basketball program was in turmoil. The 1986 drug-related death of star player Len Bias led to the resignation of then coach Lefty Driesell. He was replaced by Bob Wade, who stepped down after just three years because of numerous NCAA violations.
During the 1990's, the program rebounded under Williams' guidance, culminating with a national championship in 2002, and the opening of the Comcast Center later that year.
While he is retiring from the coaching position, Williams will not be leaving College Park. He will become a special assistant to Maryland's athletic director.