Sam Allardyce has resigned as manager of Bolton Wanderers with the Lancashire club currently sitting in fifth place in the Barclays Premiership and on the verge of qualification for the Uefa Cup.

In a statement, Allardyce said: "After nearly eight privileged years with Bolton Wanderers Football Club, I would like to announce that, after careful consideration and dialogue with my close family and senior officials within the football club, I will be resigning as manager of the club with immediate effect.

"It was mutually decided that I step down now rather than at the end of the season, to give my successor the ideal opportunity to experience the preparation and build-up of matchday in readiness of next season.

"The decision to leave the football club, which has been my spiritual home for over 18 years, as both player and manager, is one of the hardest decisions I have had to make in my life.

"However, after guiding the team into a position where the club is on the verge of qualification for European football for the second time in three years, which has been the accumulation of almost seven years of strategic building and hard work across all areas of the football club, I feel it is the right moment to step down from my duties and welcome a new exciting era for the club under different leadership.

"I feel the club is in a great position to continue its upward trajectory with a talented internationally-recognised squad, supported by an excellent Academy programme across all ages working under the guidance of a highly-skilled football management team.

"I believe the foundation of the next phase for the next development stage of the club is well and truly in place. It is with this knowledge that I feel confident that I am moving on with my life content with a legacy that I have tried to create for this special club and I wish the owner, chairman, staff, players and above all the fans every success in the future."

There was little indication that Allardyce was intent on walking away from the club he joined as an apprentice. Only eight days ago in his programme notes before the home match with Reading - which they lost 3-2 - he spoke of the immediate challenge ahead. "The main aim is to finish top of our league, and top of our league means fifth. I think that would be a major plus for a club like ours. I still maintain that around the 60-point mark would be the optimum total to achieve our aim."

Phil Gartside, the Bolton chairman, confirmed that Allardyce had left the club. "I have reluctantly accepted the resignation of Sam Allardyce after eight years of unprecedented success at the club," he said. "I would like to thank Sam for his enormous contribution to Bolton Wanderers, both as a player, but more importantly as a manager.

"Since joining the club as manager in October 1999, he has helped lead a fantastic transformation of this famous Lancashire club and has helped design and build an infrastructure that will enable the club to continue the progress that we have undoubtedly made in his period of office.

"He has given his reasons for wanting to leave the club at this time, which are private and we respect that privacy. I would like to wish Sam and his family every success in the future."

Allardyce arrived at Bolton in 1999 after helping Notts County win the old Third Division title. Promotion was achieved in 2001 when Preston North End were defeated in the play-off final at Cardiff's Millennium Stadium. Since then Bolton have continued to punch above their weight thanks to Allardyce's ability in the transfer market. They were League Cup runners-up in 2004 and qualified for the Uefa Cup for the first time a year later and another campaign beckons.