Issa, who represents north coastal San Diego and south Orange counties, is the latest California Republican to announce his retirement ahead of what is likely to be a Democratic wave in the 2018 congressional elections.
"Throughout my service, I worked hard and never lost sight of the people our government is supposed to serve", Issa said in a statement.
His district consists of parts of San Diego and Orange counties that have a solid GOP constituency, due in part to the Camp Pendleton Marine Corps installation, but that polticial base has eroded as California has moved steadily toward Democrats.
Issa, who joined the House in 2001, won re-election in 2016 by a half percentage point in a district that favored Democratic presidential nominee Hillary Clinton to President Donald Trump.
The 64-year-old, nine-term congressman did not immediately say why he won't run for Congress later this year or what he plans to do next.
The richest man in Congress, Issa had already drawn a handful of well-funded opponents.
Issa won re-election narrowly in 2016 and faces a number of well-known Democratic challengers in 2018.
Those activists have protested weekly outside Issa's Vista, California, district office - leading to a unusual scene in May in which Issa stood on his rooftop, looking down at the protesters below.
Officials from the Democratic Congressional Campaign Committee immediately released a statement cheering Issa's decision as a victory for California's 49th District and the country as a whole.
"I will continue advocating on behalf of the causes that are most important to me, advancing public policy where I believe I can make a true and lasting difference".
So far, four Democrats have announced their intention to run for the seat: Doug Applegate, Sara Jacobs, Paul Kerr and Mike Levin.
Andrew Godinich, a DCCC spokesman, said Democrats are "in a strong position" to claim the seat in November and blamed the Republican legislative agenda for Issa's retirement.