Abramovich and other Russian oligarchs have been under fire this week with English government officials calling for action to be taken against them.
Despite the growing outcry against the Russian billionaire, he had never previously shown any sign he would step away from the club, which is valued at $3 billion, according to KPMG.
It comes just days after he was reportedly set to be banned from living in Britain as a result him being classified a person "of interest" because of his links to "corrupt activity and practices" with senior Russian officials.
English member of parliament Chris Bryant this week singled Abramovich out when calling for a crackdown "targeting illicit finance and malign activity".
He said the government must consider seizing some of Abramovich's assets and stopping him from owning Chelsea, citing Abramovich's previous admissions that he paid for political influence in Russia.
Bryant got his wish on Sunday when the club announced Abramovich's news from out of the blue.
"During my nearly 20-year ownership of Chelsea FC, I have always viewed my role as a custodian of the club, whose job it is ensuring that we are as successful as we can be today, as well as build for the future, while also playing a positive role in our communities," the club statement said.
"I have always taken decisions with the club's best interest at heart. I remain committed to these values. That is why I am today giving trustees of Chelsea's charitable foundation the stewardship and care of Chelsea FC.
"I believe that currently they are in the best position to look after the interests of the Club, players, staff, and fans."
Abramovich was recently valued at $4.2 billion.
