As of the company's 2006-07 season, Bussell will be a principal guest artist.
Bussell said, in a statement, "Making the decision to cease being a principal of the Royal Ballet has not been easy for me. I am devoted to the company and always will be. I am so fortunate to enter my 19th season in good health, feeling passionate and enthusiastic about my work. However, I have always wanted to end my full-time career still dancing the full classical repertoire at the standard to which I aspire."
She added, "I will now have more time to spend with my family and be able to be more selective with repertoire choices."
Bussell joined the Royal Ballet in 1987, and became the company's youngest principal dancer at 20. She created two major roles for the late choreographer Kenneth MacMillan, and also created roles for Twyla Tharp, Matthew Hart, Christopher Wheeldon, Glen Tetley, Mark Baldwin, John Neumeier, and Michael Corder.
She had announced her retirement last year, but decided to continue for another season.
Monica Mason, the Royal Ballet's director, called Bussell a "truly dedicated professional," and said, "She always performs at the highest level and is at her bravest and most brilliant when the demands and pressures are the greatest."