In a stunning announcement that took the technology world by surprise, Apple on Thursday said Steve Jobs has resigned as its chief executive officer and named Tim Cook as his successor.

Jobs has been elected chairman of the board and Cook, previously Apple's chief operating officer, will join the board with immediate effect.

In a letter to the 'Apple Board of Directors and the Apple Community', Jobs said, "I have always said if there ever came a day when I could no longer meet my duties and expectations as Apple's CEO, I would be the first to let you know."

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"Unfortunately, that day has come. I hereby resign as CEO of Apple. I would like to serve, if the board sees fit, as chairman of the board, director and Apple employee," he said in the letter.

Jobs, 55, submitted his resignation to Apple's board of directors today and 'strongly recommended' that the board implement its succession plan and name Tim Cook, 50, as CEO.

"Steve's extraordinary vision and leadership saved Apple and guided it to its position as the world's most innovative and valuable technology company," said Genentech Chairman and Apple board member Art Levinson on behalf of the company board.

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"Steve has made countless contributions to Apple's success and he has attracted and inspired Apple's immensely creative employees and world-class executive team.

"In his new role as chairman of the board, Steve will continue to serve Apple with his unique insights, creativity and inspiration," he said.

The visionary behind some of Apple's most iconic and bestseller products like the iPod, iPhone and iPad, Jobs is a pancreatic cancer survivor.

Under his leadership, Apple revolutionised the music business through the iPod, the mobile business through the iPhone and the entertainment and media world through the iPad.

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Earlier this month, with a market capitalisation of about $346 billion, Apple briefly surpassed energy major Exxon Mobil to become the country's most valuable company.

The news of Jobs' resignation came after the markets closed on Wednesday.

In after-hours trading, Apple stock fell 5 per cent.

Jobs was diagnosed with a rare form of pancreatic cancer in 2004 and underwent a liver transplant two years ago.

In a letter in January this year, he said he was taking another leave of absence to 'focus on my health'.

He, however, emerged briefly from his medical leave during the year on a few occasions.

In March, he unveiled the second version of the revolutionary iPad and later attended a dinner hosted by President Barack Obama for technology tycoons in Silicon Valley.

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In June, he was on stage in San Francisco to talk about iCloud, Apple's latest foray into cloud-based computing.

Jobs' thin frame and gaunt appearance sparked questions about his health and for how long would he continue to be at the helm of Apple.

Jobs' medical leave of absence also raised concerns of how the technology major, which he had co-founded in a garage, would succeed without Jobs.

"I believe Apple's brightest and most innovative days are ahead of it. And I look forward to watching and contributing to its success in a new role.

"I have made some of the best friends of my life at Apple and I thank you all for the manyyears of being able to work alongside you," Jobs said.

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As COO, Cook was previously responsible for all of the company's worldwide sales and operations, including end-to-end management of Apple's supply chain, sales activities and service and support in all markets and countries.

He also headed Apple's Macintosh division.

"The board has complete confidence that Tim is the right person to be our next CEO," added Levinson.

"Tim's 13 years of service to Apple have been marked by outstanding performance, and he has demonstrated remarkable talent and sound judgement in everything he does," he said.

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Cook joined the company shortly after Jobs returned to Apple in 1997.

He has been running the day-to-day operations in Jobs' absence.

Jobs co-founded Apple in 1976 with Steve Wozniak and developed the Apple II and Macintosh computers.

He left Apple in 1985 after a power struggle with the company's board of directors.

The following year he founded NeXt Computer, a computer platform development company specialising in the higher education and business markets.

In 1986, he bought the computer graphics division of Lucasfilm and re-established it as the independent animation studio Pixar.

Apple subsequently bought NeXT in 1996, bringing Jobs back to the company he had co-founded.

Jobs has served as Apple's CEO since 1997.