The announcement came minutes into a joint session of the Zimbabwean Parliament in Harare, convened to prise the 93-year-old from power.
As the Speaker read out a letter from Mugabe, lawmakers broke out in thunderous applause. The impeachment proceedings were immediately suspended.
In the streets outside, crowds erupted in rapturous celebrations, dancing and cheering in joy, raising their fists and waving Zimbabwean flags.
It was the culmination of an extraordinary week in the history of Zimbabwe that began when the country's military leaders staged an unprecedented intervention to prevent the ascent to power of Mugabe's 52-year-old wife, Grace.
When the crisis started, it bore all the hallmarks of a coup. At the end, it almost resembled a popular revolt. "We think that this is the work of God," one young man told CNN in Harare. "We were in crisis for a long time, and this is a new day for Zimbabweans."