Sir Liam took up the role in 1998 and is the 15th person to hold the position since it was established in 1855. He is the longest serving CMO of modern times.
He had originally envisaged leaving his post when he turned 60 in mid-2009.
However, he agreed to stay in his role to supervise the response to the swine flu pandemic. He has stated that, if the pandemic should unexpectedly worsen, he will extend his tenure beyond May.
In his resignation letter, Sir Liam said he had been immensely privileged to serve in the post.
'I have been pleased to see many of my policy recommendations, such as stem cell research, smoke-free public places, reforms to the GMC, changes to consent for organ and tissue retention and the creation of the Health Protection Agency, carried forward into legislation,' he said.