Mr Yun, originally born in South Korea, has held the position as a top US diplomat to North Korea since 2016, when he took the post under former US President Barack Obama.
The foreign service veteran who is in his early 60s, visited North Korea last June to aid in securing the release of American student Otto Warmbier, whose detention and death worsened ties between Washington and Pyongyang.
State Department spokeswoman, Heather Nauert, who joined the Foreign Service in 1985, said in a statement: “Ambassador Joe Yun, a respected member of the Senior Foreign Service, has decided to retire for personal reasons.
“We are sorry to see him retire, but our diplomatic efforts regarding North Korea will continue based on our maximum pressure campaign to isolate the DPRK (Democratic People’s Republic of Korea) until it agrees to begin credible talks toward a denuclearised Korean peninsula.”
She said: “Secretary of State Rex Tillerson has reluctantly accepted his decision and wished him well.”
Mr Yun did not reveal why he chose to leave, but told CNN: “It was completely my decision to retire at his time.”
His abrupt retirement comes amid glimmers of hope for a diplomatic opening between the two nations.
South Korea has urged Washington and Pyongyang to open up the possibility to allow for talks, in an attempt to defuse the crisis over North Korea’s weapons programme.But on Friday, US President Donald Trump said he would only negotiate with North Korea under the right conditions.
Despite serving under an administration often heavily divided over how to handle Pyongyang, hte veteran diplomat always sought direct diplomacy with North Korean officials at the United Nations, a senior State Department official told Reuters late last year.
Commenting on Mr Yun’s retirement, Abraham Denmark, a former deputy assistant secretary of defence for East Asia said on Twitter: “A huge loss for the U.S. government at a critical moment.”
But many were deeply sceptical about his chances to improve diplomatic relations between the US and Pyongyang.
A White House official said late last year: “He’s such a dreamer”.
Mr Trump’s failure to nominate a South Korean ambassador has reigned in criticism in Congress and among former U.S experts and officials.