Warnock was boss at Bramall Lane for more than seven years

The 58-year-old has ended his tenure at Bramall Lane after seven-and-a-half years in charge of the Blades.

"I believe that this is the right time for me to go," said Warnock. "I'm proud of what I have achieved at this club but the decision is best for everyone."

Chairman Kevin McCabe added: "Neil has well and truly left his mark on the history of Sheffield United."

Interview: Ex-Sheffield Utd boss Neil Warnock

Warnock said he was convinced the Blades were in a good position to bounce straight back after Sunday's 2-1 defeat at home to Wigan consigned them to the Championship.

We want to take a considered view on the appointment of a new manager Blades chairman Kevin McCabe

He added: "I honestly feel the squad here is the best equipped of the three relegated teams to mount a bid for an immediate return to the Premiership.

"The fans will give the new manager 100% support at the start of next season, whereas they may not have done the same to me.

"I feel proud of what I have achieved with the club and of becoming the third longest-serving Blades manager - but this decision is the right one."

Warnock also said he wanted one more challenge before retiring from football.

"This past season has only whetted my appetite to achieve success in the game," he revealed.

"I am still enthusiastic about managing, am experienced enough to make a fresh start elsewhere and I will relish an opportunity to continue managing for a few more years.

"It will be strange taking over another club but it will be great for me to start again.

606: DEBATE I am not unhappy to see Warnock leave, I think he has had his chance and did very well for us TT

"I would love to get back into the Premiership in the near future."

Warnock also played down reports that he had decided to leave because he was unhappy with the new contract he was being offered.

"That had nothing to do with it, Kevin and myself didn't even talk about money," he insisted.

"A new contract has never entered into the conversation."

McCabe was keen to thank Warnock, who was appointed Blades boss in December 1999, for his services.

"Neil is a great motivational team manager and he has played a key role in assisting the reshaping of the club," said McCabe.

"We have come a long way with Neil and, on a personal note, I thank him for his commitment to United.

"He is and always will be a Blade and has a special place here at Bramall Lane."

McCabe also revealed the club would not rush into appointing a successor.

"We want to take a considered view as part of the transformation and shaping of one of the best clubs in the land," he stated.