Steve Jobs, who co-founded Apple (AAPL) in 1976, was ousted in 1985 and returned in 1996 to build it into the world’s most valuable technology company, resigned Wednesday as CEO. He will remain as chairman of the board.

Most Apple watchers had assumed when Jobs took an open-ended medical leave in January that he would not be coming back as a full-time chief executive. But that didn’t stop Wall Street from punishing the stock when the news broke. Having closed the day at $376.18, up $2.58 (0.69%), Apple fell nearly $20 (5.22%) in after-hours trading.

Jobs’ letter to the board and his fellow employees did not mention his health problems, but that was the clear subtext.

“I have always said if there ever came a day when I could no longer meet my duties and expectations as Apple’s CEO, I would be the first to let you know,” he wrote. “Unfortunately, that day has come.”

Ironically, Jobs has been feeling a bit better lately — good enough to make regular visits to the office.

But he spent most of the day closeted with his board of directors, and for reasons that are still not clear it was decided that the day had come to make the long-expected announcement.

The recommendation that Tim Cook be named CEO is just a formality. As chief operating officer, Cook has been running the company for some time. (See The Genius Behind Steve Jobs.) [Update: Apple has confirmed that Cook is the new CEO.]

Below: The full text of Steve Jobs’ letter of resignation.