Prof Devine, 68, will step down as director of the Scottish centre for Diaspora Studies at Edinburgh university on July 31.
He has written nearly 40 books, including the international bestseller The Scottish Nation, and is the only historian to have been awarded Scotland's premier academic accolade, the Royal Medal, by the Queen.
Prof Devine said he was retiring at a time when the independence referendum had generated unprecedented interest in Scottish history worldwide.
He said: "It is definitely time for me to go. I did actually retire three years ago but the university brought me back for research and managerial reasons.
"It's been tremendously exciting to be involved when the subject has come of age and has considerable dynamism. Scottish history can hold its head up."
Prof Devine added that he would continue public speaking in retirement.
"I intend giving public lectures as the amount of hunger out there in Scottish history is unbelievable. There is a generation in their 40s and above who never really had Scottish history at school, it is a profound educational deficit.
"I'll also be writing about Scotland's amnesia over slavery."
Prof Devine will bow out in a conversational event alongside former prime minister Gordon Brown, at McEwan Hall on June 16. The pair will discuss Scotland's history in the run-up to the September referendum. The 'Scotland's Past and Scotland's Present' event, chaired by broadcaster Jim Naughtie, is ticketed but free to attend.