Ensign insisted he's done nothing wrong, but said he could no longer expose his family and constituents to the intense focus on his extramarital affair with a former staffer and the ethical allegations clouding that relationship.
"For my family and me, this continued personal cost is simply too great," he said in a statement.
Ensign said he will send an official resignation letter to Vice President Joe Biden on Friday. The resignation would be effective May 3.
"While I stand behind my firm belief that I have not violated any law, rule, or standard of conduct of the Senate, and I have fought to prove this publicly, I will not continue to subject my family, my constituents, or the Senate to any further rounds of investigation, depositions, drawn out proceedings, or especially public hearings," Ensign said.
"The Senate Ethics Committee has worked diligently for 22 months on this matter and will complete its work in a timely fashion," the senators said.
Ensign could also be vulnerable to questions about his role in the aftermath of the affair. The husband of his former lover, who was also a former aide to Ensign, has been indicted for illegally lobbying the senator's staff.
The Justice Department and the Federal Election Commission investigated and then dropped cases against Ensign with little explanation. The ethics committee, however, named a special counsel in February to look into the matter.
In his resignation notice Thursday, Ensign said that appointment shook him because he had hoped the investigation would end with the Justice Department.
Ensign announced in June 2009 that he had an extramarital affair with Cynthia Hampton, a former member of his campaign staff, and that he had helped her husband, Doug Hampton, a member of his Senate staff, obtain lobbying work with two Nevada companies.
Federal law prohibits a former senior Senate aide from lobbying the Senate for one year after terminating employment.
Ensign announced in March he would not pursue re-election in 2012 to protect his family from campaign attacks involving his role in Doug Hampton's lobbying career. He added that the Senate investigation hadn't influenced his decision.
"If I was concerned about that I would have resigned, because that would make the most sense because then it goes away," he said last month.
Citizens for Responsibility and Ethics, the government watchdog group that requested the Senate ethics investigation, criticized Ensign Thursday for not resigning sooner.
"Sadly, it's not because he's seen the error of his ways, or even to 'spend more time with his family,'" executive director Melanie Sloan said in a statement. "The truth no one is likely to admit is that Sen. Ensign is being pushed out to give the Republican party a leg up in the 2012 election."
Republican Gov. Brian Sandoval will now appoint someone to serve the remainder of Ensign's term, and choosing U.S. Rep. Dean Heller or another Republican would give the party the advantage of incumbency in a highly competitive seat that could decide which party controls the Senate after 2012.
Sandoval endorsed Heller minutes after his campaign announcement in March.
Republican Party officials said they hoped Sandoval would appoint Heller to Ensign's seat. The officials spoke on condition of anonymity to discuss internal deliberations.
Democratic U.S. Rep. Shelley Berkley is also running and is considered the strongest Democratic contender.
Former Gov. Bob List, now a member of the Republican National Committee, urged the governor to appoint Heller to the seat as Nevada Democrats quickly began their campaign to influence Sandoval's decision.
"Nevada needs a senator who is focused on creating jobs and protecting our middle class, not ending Medicare as we know it and giving more tax breaks to the rich, like Dean Heller is trying to do," Nevada Democratic Party spokesman Zach Hudson said.