With Syria spiraling ever further out of control and the UN Security Council riven by division over the future of President Bashar al-Assad, Annan's withdrawal dealt a hammer blow to hopes for a political solution.
"I did not receive all the support that the cause deserved," Annan said, as he announced the end of his mission. UN Secretary General Ban Ki-moon said he would seek a replacement, but none was waiting in the wings.
"I accepted this task, which some called 'Mission Impossible', for I believed it was a sacred duty to do whatever was in my power to help the Syrian people find a peaceful solution to this bloody conflict," Annan said.
"The increasing militarization on the ground and the clear lack of unity in the Security Council, have fundamentally changed the circumstances for the effective exercise of my role," he told reporters in Geneva.
"At a time when we need, when the Syrian people desperately need, action there continues to be finger-pointing and name-calling in the Security Council," he complained.
Annan took the post in February and has since been to Damascus to meet Assad three times. The Syrian leader accepted Annan's six-point peace plan, including a ceasefire and moves toward political talks, but never carried it out.
International divisions have become apparent with Russia and China using their vetoes as permanent members of the Security Council to block three resolutions which could have led to Syria sanctions.
The conflict has worsened with the death toll now over 20,000 -- according to Syrian activists -- and the opposition to Assad increasingly well organized.
Annan predicted that Assad would leave office "sooner or later".
The secretary general expressed "deep regret" at Annan's decision to leave when his mandate ends on August 31. Ban also said that "divisions" within the major powers had become an obstacle to Annan's efforts.
"Kofi Annan deserves our profound admiration for the selfless way in which he has put his formidable skills and prestige to this most difficult and potentially thankless of assignments," Ban said.
"Tragically, the spiral of violence in Syria is continuing," he added.
"Both the government and the opposition forces continue to demonstrate their determination to rely on ever-increasing violence," Ban said.
"In addition, the persistent divisions within the Security Council have themselves become an obstacle to diplomacy, making the work of any mediator vastly more difficult."
The special envoy had asked the 15-nation UN Security Council to threaten "consequences" on the regime if it thwarted the peace plan, which included the withdrawal of heavy weapons from cities and moves toward political talks.
But on three occasions now Russia, Assad's main ally, and China blocked draft UN resolutions which could have led to sanctions, saying that Western nations only want regime change.
Quarrelling over the cause of the resignation started straight away.
US presidential spokesman Jay Carney said Annan's move "highlights the failure in the United Nations Security Council of Russia and China to support meaningful resolutions against Assad that would have held Assad accountable for his failure to abide by the Annan plan."
"We understand Annan's frustration that, due to vetoes in the Security Council, the international community was unable to give him the support that he needed and requested," said Britain's Foreign Secretary William Hague.
Annan's decision to quit is an indication of the "dramatic stalemate" in the crisis, said French Foreign Minister Laurent Fabius who is trying to organize a ministerial meeting on Syria at the UN headquarters.
Russian President Vladimir Putin, on a trip to London, called Annan's resignation a "great shame", according to Russian news agencies.
"But I hope that the international community's efforts will remain focused on ending the violence," he added.
"We understand that that's his decision, we regret that he chose to do so," Russia's UN ambassador Vitaly Churkin told reporters insisting that his country had given very strong support to the peace plan.
Asked about Russia's vetoes, Churkin said: "I have regrets that some council members chose to try to push their agenda through the council."
France's UN ambassador Gerard Araud said that some names of possible replacements for Annan were already being discussed. He declined to give details.