Guerrero originally planned to walk away after his contract expired in December. However, he agreed to a six-month extension that gives the school more time to find his long-term replacement.
The 67-year-old has served in his current role since April 2002 and is the second-longest-tenured athletic director in the Power 5 conferences.
"Today is bittersweet for me and for my family, as UCLA has been a part of my life for more than 50 years," Guerrero said in a statement. "It truly has been the honor of a lifetime to serve this world-class university and, more importantly, to befriend so many incredible Bruins along the way.
"I am so grateful to chancellors (Albert) Carnesale, (Norman) Abrams, and (Gene) Block for their confidence in my leadership and incredible partnerships over the years, and to the many student-athletes, coaches and colleagues with whom I have had the privilege of working."
Guerrero cited his recent battle with cancer and the birth of his second granddaughter among the reasons he decided to retire.
Under the Arizona native, the Bruins won 32 NCAA championships across all sports but largely failed to meet expectations in football and men's basketball.
Fresno State athletic director Terry Tumey is considered a strong candidate to succeed Guerrero, reports Ben Bolch of the Los Angeles Times.