The announcement comes two years after Mr Jobs took a six-month break during which he underwent a liver transplant
Following the news, the company's shares had fallen 8.3% in Frankfurt by 1503 GMT, while futures for the SP 500 and tech-heavy Nasdaq dropped 0.3% and 0.9% respectively.
The US markets, which are currently closed for a holiday, will resume trading on Tuesday.
"At my request, the board of directors has granted me a medical leave of absence so I can focus on my health," Mr Jobs said in an email to Apple employees.
"I will continue as CEO and be involved in major strategic decisions for the company," the e-mail read.
Without specifying his health issues, Mr Jobs said he had asked Tim Cook "to be responsible for all of Apple's day-to-day operations" in his absence.
"I have great confidence that Tim and the rest of the executive management team will do a terrific job executing the exciting plans we have in place for 2011.
"I love Apple so much and hope to be back as soon as I can. In the meantime, my family and I would deeply appreciate respect for our privacy."
The company's fortunes have been uniquely linked to their CEO, who returned to the company in 1997 after a 12-year absence to turn around the flagging tech giant with innovative and wildly successful products like the iPod and iPhone.
Mr Jobs underwent an operation in 2004 for pancreatic cancer, which was kept under wraps until years later.
Questions about his health have resurfaced periodically since the cancer diagnosis, and have been the subject of much debate among corporate governance experts over the obligations the company has to its shareholders.
Tim Cook will be responsible for Apple's day to day operations.
Taken from Yahoo news with permission.
"My lovely car now sold onto a very happy new owner.
I still love this marque and I will still be around, preferred selling to breaking, as a great runner and performer"