Dean was to announce his plans at a news conference later Wednesday.
CBSNews.com will Webcast Dean's appearance around 1 p.m. ET
"Today my candidacy may come to an end — but our campaign for change is not over," Dean wrote in a message posted on his campaign website late Wednesday morning. "In the coming weeks, we will launching a new initiative to continue the campaign you helped begin."
"This party and this country needs change, and you have already begun that process," Dean wrote.
"The fight that we began can and must continue," he added.
The move follows Dean's distant third place finish in Tuesday's Wisconsin primary. Frontrunner John Kerry won with 40 percent and John Edwards was second with a surprisingly strong 34 percent. Dean had 18 percent.
In the wake of Wisconsin, Kerry focused on President Bush, Edwards talked about a two-man race and Dean flew back to Vermont to plot his next steps.
Before Wisconsin voted, Dean aides said the former Vermont governor was torn between accepting the inevitable — that he was effectively out of the race — and a devotion to his cause and supporters.
From virtual nobody to front-running Internet whiz to screaming voice of defiance to also ran, Dean has had more highs and lows in a year than most politicians experience in an entire career.
The leader in national polls — and more important state polls in the first states of Iowa and New Hampshire — Dean seemed poised to win the nomination in a runaway. In the end, he never won a single state through 17 contests.
Historians will judge, but Dean and his devoted supporters are convinced that they more than anyone else defined the Democratic debate through his unwavering criticism of Mr. Bush, the Iraq war and Democrats who helped Bush push his agenda through Congress.
"Because of your work, we have already written the Democratic Party platform," Dean declared Monday night at an exuberant Madison rally that harkened to the heady days when he was more focused on a running mate than exiting the race.
Dean was the most unlikely of heroes for this movement of liberals, disaffected voters and youth. Born to wealth on New York's Park Avenue, his Yale pedigree was much closer to Mr. Bush's than the working people to whom he said he was giving voice.
As he left the Vermont governor's office in January 2003 after nearly 12 years, Dean had a presidential campaign staff of a half-dozen and about $157,000 in the bank.
But one of those staffers had found a then-obscure Internet organizing site, known as MeetUp.com. Dean became the first political candidate to sign up for it and suddenly thousands of people were finding him, organizing local events and fund-raisers and slowly making him a force.
His blunt speaking style and full-throated opposition to the Iraq war — at a time when almost all of the other major contenders were trying to explain their support for it — gave him an edge.
By February last year, he had begun focusing his criticism not just on Mr. Bush but on his fellow Democrats, accusing them of being too timid in fighting for the party's core principles.
"I'm Howard Dean and I represent the Democratic wing of the Democratic Party," Dean declared at a Democratic National Committee meeting in Washington last year that caught everyone's attention.
Dean tapped into Democrats' nagging belief that their national leaders had lost their way and were too blindly allowing Mr. Bush and the Republicans to set the agenda.
Even at that early stage there were signs of Dean's penchant for speaking before all the facts were straight. He apologized to Edwards for mischaracterizing the North Carolina senator's position on the Iraq war, and offered his regrets to foe Bob Graham for dismissing him as a second-tier candidate.
Each misstep, though, seemed only to embolden Dean and his supporters.
After Dean's performance on NBC's "Meet the Press" last June was widely panned, supporters decided to prove the establishment wrong, raising more than $3 million over the Internet in just a week.
Suddenly, Dean appeared to be the man to beat. His opponents stepped up the criticism. Dean stirred controversy in November for saying he wanted "to be the candidate for guys with Confederate flags in their pickup trucks."
But then he then he won the endorsement of two of the country's largest unions — the American Federation of State, County and Municipal Employees and the Service Employees International Union — and snagged one of the biggest prizes — the backing of former Vice President Al Gore, the nominee in 2000.
Days before the Iowa caucuses, 4-year-old tapes surfaced of Dean telling Canadian television that caucuses are dominated by special interests. He doused that firestorm quickly by winning the endorsement of Iowa Sen. Tom Harkin.
While it always appeared that Dean could emerge unscathed from the missteps, ultimately, it added up and voters decided to go with a familiar Washington face.
By the time the Iowa votes were counted, Dean had finished a distant third behind Kerry and Edwards. It was the first election loss of his 20-year career. Then Dean ended his full-throttle concession speech with a scream that has played endlessly on the Internet and late-night talk shows.
A decent second-place showing in New Hampshire kept hope alive, but Dean faltered in the few Feb. 3 primaries where he had once been competitive. He all but gave up on Washington, Michigan and Maine, and paid little attention to Virginia or Tennessee.
He declared Wisconsin a "must-win" state, then hedged his bets. But a third-place finish there finally made the odds too high for a candidate who had consistently defied them.