Mr Blessing has been in charge since May 2008 and had been asked by the bank to extend his current contract, which runs out in October of 2016.
He said it had not been an easy decision but felt that now was a good time for a "new chapter" in his career.
Mr Blessing helped the bank recover following the financial crisis.
In 2008 and 2009, the government invested around â‚¬16.4bn (Â£11.7bn; $18.1bn)  in Commerzbank as it struggled to integrate the distressed Dresdner Bank into the group.
"We have overcome the major challenges of the financial crisis or will do so in the coming months. We are also clearly on track to reclaiming our position as a sustainably successful bank," Mr Blessing said in a statement.
It is not clear yet who will take over from Mr Blessing.
Commerzbank reports third quarter results on Monday.
Martin Blessing, chief executive of Germany's second biggest lender, Commerzbank, is to step down next October.