Yahya Jammeh has agreed to cede power to new leader, he said in an address on state TV.
He steps down after 22 years in power.
Jammeh's successor Adama Barrow told a press conference, 'the rule of fear is over' as he prepares to return to The Gambian after being sworn in as president in neighbouring Senegal on Thursday and
Defeated Gambian President Yahya Jammeh has been ordered to give up power by midday on Friday by West African leaders or be forced out by regional troops already in the country.
Sengalese troops entered The Gambia on Thursday but they have been told to halt their advance while negotiations continue to bring a peaceful end to the crisis.
The United Nations Security Council has backed ECOWAS's efforts to ensure Barrow assumes power, and the United States said it also supported the intervention.
The main opposition has said it is unhappy at the offer of asylum for Yahya Jammeh who had refused to step down as president.
Regional troops have secured the presidential palace in the Gambia's capital but there are fears the former leader has raided state coffers.
It ends a political standoff that briefly saw Yahya Jammeh and Adama Barrow claiming leadership of this tiny West African nation.