United confirmed in a statement released on their official website on Wednesday morning that Gill is to leave his post on June 30, with his duties being taken on by executive vice chairman Ed Woodward.
Gill, who joined the Red Devils as their finance director in February 1997 and assumed the role of chief executive in September 2003, is to remain as a director at Old Trafford.
His tenure as chief executive - during which the Glazer family completed their controversial takeover of the club - has seen United win four Premier League titles, one FA Cup, three League Cups and the 2008 Champions League.
Ferguson said: "I have been at United for over 26 years and for 23 of those years my boss has been one of only two men: Martin Edwards, who brought me to the club, and David Gill. I have enjoyed working with both.
"David has been a magnificent chief executive.
"Of course, we have had a million arguments, but I have always enjoyed them because I know that David has two great qualities: he is straight and he always puts Manchester United first.
"No disagreement is ever personal with him. He always wants the best for United, whether it's the players, the training ground or the staff.
"Him stepping down is a big loss to me but the fact that he is staying on the board encourages me that the reason for his departure is heartfelt, (and) that he believes it is time for the club to move on.
"If I could have found a way of persuading him to stay I would love to have done that. But he has made his decision and I respect him for it."
Speaking about that decision, Gill stressed his belief that "all businesses need to refresh themselves with new management and ideas".
The 55-year-old - who was appointed as the vice chairman of the Football Association last October and is their nominee for the UEFA Executive Committee elections in May - said: "It has been a very hard decision because I love this club and, as the fans' banner says, it is 'more than a religion'.
"However, I have always been conscious of the fact that, as a member of staff, I was always just a temporary custodian of this marvellous institution.
"I am also of the view that all businesses need to refresh themselves with new management and ideas and after 10 years in charge I believe it is appropriate for someone new to pick up the baton.
"I am looking forward to continuing my involvement on the club board. And I hope to be able to make a contribution to the game on a wider national and European level."
Though Gill will remain in the shadows, his decision creates an element of uncertainty at Old Trafford.
Woodward, who has overseen the massive progress made by the Red Devils' commercial department, will take over many of Gill's responsibilities.
It is, however, envisaged Woodward will remain based at the club's London offices, with current commercial director Richard Arnold becoming the most senior figure at Old Trafford.
The situation has been likened to that encountered at Arsenal following the exit of David Dein, whose departure was viewed by many as the start of that club's decline.
Yet Ferguson does not view the situation in the same way.
"There is a good stability here. That must help," he said.
"The foundations David has laid down from his side of it are easy to carry on from.
"There is a template there for us to follow.
"The job is to support the manager and the staff to maintain the success they have. I don't think that should change that much."
Woodward has been attending Premier League meetings on United's behalf in an attempt to get his head round the intricate world of football politics.
And Ferguson believes the manner of the 40-year-old's promotion is another sign that the Glazer family remain wedded to the in-house philosophy that has proved so successful down the years.
"United are great at promoting from within and we have done it again with Ed Woodward stepping up," Ferguson said.
"Remember, David came as the finance director and ended up as chief executive.
"From the football side, Mike Phelan came as reserve coach and ended up as my assistant. Rene Meulensteen came as a development coach and is now my first-team coach. Brian McClair came as a youth coach and is now director of the academy.
"We see quality and potential in a lot of our staff. That happens throughout the club. There shouldn't be a big problem."
Is Gill really tall, or Fergie smaller than i remember? Or is there a box hidden in that picture?- hump3