Summers will leave his post as director of the National Economic Council to return to Harvard University as a professor.
"I will miss working with the president and his team on the daily challenges of economic policymaking," Summers said in a written statement. "I'm looking forward to returning to Harvard to teach and write about the economic fundamentals of job creation and stable finance as well as the integration of rising and developing countries into the global system."
Summers will continue to serve as a member of Obama's economic advisory board.
Summers leaves as the economic recovery limps along with unemployment stuck near 10 percent. He would be the third high-level member of the Obama economic team to leave this year, following the departures of budget director Peter Orszag and Christina Romer, head of the Council of Economic Advisers.
"I will always be grateful that at a time of great peril for our country, a man of Larry's brilliance, experience and judgment was willing to answer the call and lead our economic team," Obama said in a written statement.
Geithner praised Summers for his performance.
"Few economists can claim as big an imprint on American history as Larry Summers. In the 1990s, he was instrumental in fostering a period of shared and lasting economic growth," he said in a written statement. "And over the past few years, his insights have been essential to helping President Obama guide us through the worst economic crisis since the Great Depression."
Obama had signaled as recently as Monday that changes were imminent for his economic team. Over-worked staffers were "going to have a whole range of decisions about family that'll factor into" their career decisions, he said.
Speculation has been swirling for months that Treasury Secretary Geithner and Summers could be blamed for a potentially weak showing in the midterm elections with the economy turning voters against Democrats.
President George W. Bush ousted his first Treasury secretary and National Economic Council director two years into his first term after the midterm elections in which his party picked up seats.
