The statement said he would not hold future government positions or have any representatives in parliament.
Mr Sadr and his group, the Mehdi Army, gained prominence after the US-led invasion of Iraq in 2003.
Mr Sadr's statement said he was shutting down all his offices except for some charities.
Born into a religious Shia family, the cleric galvanised anti-US sentiment in sermons and public interviews after the overthrow of Saddam Hussein eleven years ago.
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