He is succeeded by Martin Newland, 42, the former deputy editor of the National Post in Canada and a former home editor of The Telegraph.
A statement from The Telegraph said that Moore, 46, "has reluctantly decided to retire" to write his biography of Lady Thatcher.
However, there has been speculation for some time over Moore's role as the newspaper's circulation fell below the one-million sales mark. Some observers have suggested that Moore's highbrow approach has failed to keep or attract readers, particularly at the younger end of the market.
Newland rose through the editorial ranks at The Telegraph before moving to Canada to assist the Telegraph Group chairman, Lord Black, with the launch of the National Post in 1998.
Newland said: "It's an honour to take over from Charles Moore, who has fought a successful battle to modernise the product and win the price war with The Times. I look forward to building on The Telegraph's success as the market leader."
Moore will continue to work for The Telegraph as a columnist and group consulting editor. Black paid tribute to his tenure as editor, applauding his "substantial modernisation, while being faithful to the newspaper's best traditions".
Black said: "Martin Newland will, I am sure, uphold the high standard of Bill Deedes, Max Hastings and Charles Moore. He is a Telegraph veteran who was an important part of the great success of the National Post."
The Telegraph recently revamped with the introduction of columnists such as Irvine Welsh and a redesign to create a broader appeal.
However, its average August sale was 904,448, down 4 per cent year-on-year.
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