In a pre-recorded address broadcast on TV, the Queen said she would formally stand down on April 30.
Queen Beatrix, who is approaching her 75th birthday, said she had been thinking about this moment for several years and that now was “the moment to lay down my crown”.
She has been head of state since 1980, when her mother abdicated.
In the short televised statement, Queen Beatrix said it was time for the throne to be held by “a new generation”, adding that her son was ready to be king.
Prince Willem-Alexander, 45, is married to Maxima Zorreguieta, a former investment banker from Argentina, and has three young children.
He is a trained pilot and an expert in water management.
Prince Willem-Alexander will become the Netherlands’ first king since Willem III, who died in 1890.
Speaking on television immediately after the abdication announcement, Dutch Prime Minister Mark Rutte paid tribute to the queen.
“Since her coronation… she has applied herself heart and soul for Dutch society,” he said.
Queen Beatrix is the sixth monarch from the House of Orange-Nassau, which has ruled the Netherlands since the early 19th Century.
Correspondents say she is extremely popular with most Dutch people, but her abdication was widely expected and will not provoke a constitutional crisis.
Under Dutch law, the monarch has few powers and the role is considered ceremonial.
In recent decades it has become the tradition for the monarch to abdicate.
Queen Beatrix’s mother Juliana resigned the throne in 1980 on her 70th birthday, and her grandmother Wilhelmina abdicated in 1948 at the age of 68.
Queen Beatrix will be 75 on Thursday.
She has remained active in recent years, but her reign has also seen traumatic events.
In 2009 a would-be attacker killed eight people when he drove his car into crowds watching the queen and other members of the royal family in a national holiday parade.
In March last year her second son, Prince Friso, was struck by an avalanche in Austria and remains in a coma.
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