There is a report just in that Pope Benedict is resigning on February 28.
VATICAN CITY) — Pope Benedict XVI has announced that he will resign Feb. 28, the first pontiff to do so in nearly 600 years. The decision sets the stage for a conclave to elect a new pope before the end of March.
This would be the fifth time that a Pope has abdicated in the history of the Papacy, the most recent being Pope Gregory XII in 1415. Further details as they come in.
Update: Here is the statement of the Pope: