"Working alongside the incredibly talented and driven women and men of the SEC has been the highlight of my career," said Clayton, who was appointed under President Donald Trump.
"I am proud of our collective efforts to advance each part of the SEC’s tripartite mission, always with an eye on the interests of our Main Street investors."
Clayton has said he wants to return home to New York and was expected to resign before his term ends in June. His official departure would position senior Democratic SEC Commissioner Allison Lee to serve as acting chair.
Under Clayton, the SEC has pursued changes to regulations that critics saw as burdensome or hindering corporate growth, often in the face of opposition from Democrats and investor advocates.
Progressives are keen for former Democratic SEC Commissioner Kara Stein to fill the role, although Rob Jackson, also a former Democratic commissioner who currently teaches at New York University School of Law, is preferred by moderates.
Former derivatives market regulator Gary Gensler, who now works on a transition plan for financial industry oversight under Democratic President-elect, Joe Biden, is also a contender, sources told Reuters.
(Additional reporting by Lisa Lambert and Doina Chiacu; Editing by Catherine Evans)