Walters, who began in television news as a "Today" girl in 1961, became the medium's best-known interviewer and invented a daytime talk show at an age many people would be going fishing, said on "The View" that she will step away from the camera next summer.
Before that, her retirement tour will include TV specials looking back at her work.
The announcement brought the 83-year-old Walters to tears. While not necessarily a surprise - reports about the plan leaked out about a month ago and it was confirmed by ABC on Sunday night - the discussion was alternately saucy and emotional.
"In the summer of 2014 I plan to retire from appearing on television at all," Walters said.
She preceded her announcement with a taped piece outlining career highlights, from her appearance in a Playboy bunny outfit on "Today" to her interview with Syrian President Bashar Assad last year. She mentioned her pride in rising to "Today" co-host and becoming the first woman on a network evening news program, co-anchoring with Harry Reasoner on ABC. Her interviews became her calling card, sitting across from actors and presidents. Her prime-time talk with Monica Lewinsky set a ratings standard.
When she started "The View" with executive producer Bill Geddies 17 years ago, Walters said she thought it would last a year or two.
She's been through some health problems this year, being hospitalized after a fall taken while leaving a pre-inaugural party in Washington and developing chickenpox. She didn't cite that as a reason for leaving, saying she is in perfect health and isn't being pushed out.
"I want to leave while people are still saying, 'why is she leaving?' instead of 'why doesn't she leave?" Walters said.
Joy Behar, her last remaining original co-host on "The View," took issue with Walters saying in her taped intro that she wasn't as beautiful as other women on television. Men on TV don't talk about how handsome they are, she said.
Walters noted that she'd been asked whether she had "slept her way to the top."
"I wish I had, because I would have made it much faster," she said.
New York City Mayor Michael Bloomberg stopped by to salute Walters on the live telecast. The audience was stocked with brass from ABC and parent company Disney, including Disney CEO Robert Iger. Walters joked with Iger about appearing on "Dancing With the Stars" together.
"You made a difference in how journalism, particularly television journalism, is done today," Bloomberg said. "You didn't make enemies. You were not nasty about it."
Besides continuing to appear on "The View" and reporting for ABC News in the next year, Walters will host a 20-year retrospective of her most fascinating people series in December, an Oscars special and a career retrospective next May.
"I've had an amazing career - beyond anything I could have imagined," Walters said, "and I hope I have inspired some other women both in front of and behind the camera."