“Even in our currently polarised nation, it’s my hope that the facts will win the day, that the truth will always matter, that journalism and journalists will survive,” Smith said.
Smith, who was also managing editor of the network’s breaking news unit, has been one of the few senior journalists on Fox News to criticise Trump.
His departure follows attacks by Trump on the network’s less friendly coverage of his administration since the US House of Representatives began an impeachment inquiry, which opinion polls suggest has growing support from Americans.
The New York Times reported earlier on Friday that US Attorney General William Barr met this week with Rupert Murdoch, whose Fox Corp owns Fox News.
“FoxNews doesn’t deliver for US anymore. It is so different than it used to be. Oh well, I’m President!,” Trump tweeted on Thursday.
In March, Smith took issue with Trump’s criticism of the late Republican Senator John McCain, and in August Smith spoke out about the “unmistakable rise of white nationalism and white racism in America” which Democrats say Trump has not done enough to discourage.
In September, Smith called out Trump for his mistaken insistence that the state of Alabama was in the path of Hurricane Dorian.
Trump, who has repeatedly criticised the US media as “the enemy of the people,” has lashed out publicly against Shepard.
“Watching Fake News CNN is better than watching Shepard Smith, the lowest rated show on @FoxNews,” Trump tweeted in August.
Smith has been with Fox News since it was launched in 1996 and his departure took colleagues by surprise.
“Shepard Smith just dropped a bomb … He was part of the glue that held Fox together. He is a supreme pro who made us all better,” Fox News chief White House correspondent John Roberts tweeted on Friday.
Fox News President Jay Wallace in a statement called Smith “one of the premier newscasters of his generation.”
“While this day is especially difficult as his former producer, we respect his decision and are deeply grateful for his immense contributions to the entire network,” Wallace said.