He broke into the majors in 1968 as a teenager with the Atlanta Braves. The All-Star outfielder won a World Series with the 1981 Dodgers.
He went on to manage five different teams over 26 seasons and won the World Series at the helm of the Astros last November.
Baker, who ranks seventh all-time with 2,183 career victories, said he would still like to remain involved in the game in an advisory position.
"I've still got a lot to offer; baseball has been my life," Baker said.
"I have a lifetime of knowledge, much more than those who have never played the game."
The Astros were eliminated from the postseason when they lost to the Texas Rangers in Game Seven of the ALCS on Monday.
A press conference at which Baker will announce his departure is scheduled to be held at Minute Maid Park on Thursday.
