The 63-year-old explained: "After 25 years, I should rather like to go to bed at much the same time as most people.
"This was a decision I reached - and informed the BBC of - last July. I shall work out the remainder of my contract and will not seek another."
Certainly, the BBC can be thankful to Paxman for sticking around. Had he departed last summer, it would have dealt another blow to a programme which had only just begun to recover its reputation.
That reputation had been severely soiled in the wake of the Jimmy Savile scandal when a report into the paedophile's misdemeanours had been controversially dropped, only for the story to surface later on ITV.
Newsnight then compounded its error with a separate report on the subject which wrongly implicated Tory peer Lord McAlpine in abuse allegations.
Ofcom upheld the complaint from the peer as, although he was not named directly in the report, internet speculation had made him easily identifiable.
The regulator also criticised programme makers for not contacting Lord McAlpine prior to the broadcast, and the crisis cost BBC Director General George Entwistle his job after just 54 days.
Paxman almost quit then as well - but felt that "loyalty commanded [he] stayed".
Another 18 months down the line, though, he has called it a day - to the huge sounds of relief from politicians representing all hues.
At his best (or his worst, depending on your perspective), Paxman was gloriously insatiable, like a dog with a bone in holding Westminster into account.
Of course, still his most famous interview was in 1997 with Michael Howard, the former Home Secretary in the John Major government.
The story concerned a meeting between Mr Howard and Derek Lewis, the head of Her Majesty's Prison Service about the possible dismissal of the head of Parkhurst Prison.
And the exchange achieved notoriety when Paxman asked Mr Howard if he had "threatened to overrule" Mr Lewis on no fewer than 12 occasions.
Paxman later explained he had only continued to pursue the question because he had been made aware that the videotape for the next story was not ready.
Nevertheless, his place in British television news history - and that of Mr Howard - was effectively assured.
As well as being a consummate interviewer, Paxman - in his latter days especially - has become a rather independent observer of the machinations of the BBC, happily criticising his employer for some of its excesses.
But, if that also shows perhaps just how disenchanted Paxman has become, nothing will quite match the complete disdain he had for an editorial decision in 2005 to replace news of the financial markets with a weather forecast.
Paxman was at his scathing best in delivering the reports, introducing the first, as follows:
"Now, on the theory that while some people are interested in the markets, everyone's interested in the weather, here it is - shorn of the usual folksy nonsense about clouds bubbling up and advice about wearing woolly socks: eastern parts will mainly avoid the rain except for those that don't. Western areas will be cloudy with rain, except in those places that don't have rain."
A second forecast, which he sarcastically stated was "by popular demand", was a lot more pithy: "Take an umbrella with you tomorrow".
And, in a third example, he greeted the map by saying: "It's a veritable smorgasbord. Sun. Rain. Thunder. Hail. Snow. Cold. Wind. Almost worth going to work."
Finally, showing a map full of sunshine and showers, he simply stated: "It's April - what do you expect?"
All is well that ends well for Paxman, though - news of the markets were restored after just 10 days.
He will continue in his role as host of University Challenge.
