In a broad-ranging interview at his Cape Town office, a smiling Mr Mandela, widely seen as the key stabilising factor in South Africa's delicate transition from white minority rule, said: "In 1999 I will be 79 or 80. I don't think an octogenarian should be meddling with political affairs.
"I would like to give over to a younger man. I will be available for advice if they want me, but to occupy a position as a head of state, definitely, I won't take that risk."
Mr Mandela, who has led the government of national unity since winning historic multi-racial elections last April, did not indicate who might succeed him. The First Deputy President, Thabo Mbeki, 52, is widely regarded as the most likely candidate.
Asked about occasional speculation on financial markets that he was in poor health, he replied: "I think somebody is gaining a lot through spreading these rumours. For my age, I think I am in reasonably good health. I enjoy walks. One of my favourite hobbies is to walk . . . sometimes I take three, four and even as much as five hours just walking. A person whose health is frail would not do that. Ask my security guards."
Mr Mandela was asked about allegations of misuse of foreign aid funds by his estranged wife Winnie and the ANC politician Allan Boesak, who this week withdrew as ambassador-designate to the United Nations in Geneva.
Showing no emotion and referring to his wife as "Mrs Mandela", the President said judgment should be suspended on her conduct until an investigation had been completed. Any action against Mr Boesak would depend on the outcome of a separate inquiry, he said.
He added: "I think the way we have handled the Boesak affair indicates the firmness of the ANC, by the caution it exercises before it takes any action." Mr Boesak has been accused, by Scandinavian donors, of misappropriating funds intended for his Foundation for Peace and Justice. He has denied the allegations.
Winnie Mandela, a deputy minister in her husband's government, is at the centre of a dispute over her leadership of the ANC Women's League. Senior league members, who resigned last weekend, have accused her of not passing on to league officials a 500,000-rand (£875,000) donation from the President of Pakistan, Benazir Bhutto.
Mrs Mandela has claimed that the money was given to her to disburse to the needy as she wished.