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* Ferguson will leave Manchester United this month
* Moyes and Mourinho favourites to take over
By Martyn Herman
LONDON, May 8 (Reuters) - Alex Ferguson, Britain's longest-serving and most decorated soccer manager, will retire at the end of the season after more than 26 years and nearly 1,500 matches at the helm of Manchester United, he announced on Wednesday.
The 71-year-old Scot ended intense speculation that he was about to call time on his career by confirming he would step aside after champions United's last game of the season at West Bromwich Albion on May 19.
His decision ends a glittering era at Old Trafford in which the club won 13 English league titles, two European Cups, five FA Cups and four League Cups as well as the FIFA Club World Cup.
Former Chelsea manager Jose Mourinho and Everton's long-serving boss David Moyes, a Scot like Ferguson, are the bookmakers' favourites to take over.
Ferguson arrived in Manchester in 1986 after Ron Atkinson was sacked and, after a difficult start, began building an empire that shows no sign of crumbling with the club recapturing the English title from Manchester City this season.
"The decision to retire is one that I have thought a great deal about and one that I have not taken lightly. It is the right time," Ferguson, who has been in charge of 1,498 matches for the club, winning nearly 900 of them, said on United's website (www.manutd.com).
United said Ferguson, who is to undergo hip surgery during the off-season, would remain at the club as a director.
"It was important to me to leave an organisation in the strongest possible shape and I believe I have done so," added Glasgow-born Ferguson who had announced he would retire after the 2001-02 season before changing his mind.
"Going forward, I am delighted to take on the roles of both director and ambassador for the club," he said.
"With these activities, along with my many other interests, I am looking forward to the future."
Ferguson, who in 2010 surpassed Matt Busby's as the longest-serving manager in United's history, had given no hint of his retirement in his programme notes for Sunday's home game against Chelsea, appearing to suggest he would continue his reign for the foreseeable future.
"Whether I will be here to oversee another decade of success remains to be seen but I certainly don't have any plans at the moment to walk away from what I believe will be something special and worth being around to see," he wrote.
The suddenness of his decision left some who served under him in a state of disbelief.
"I'm shocked, it's a bombshell," said former United goalkeeper Peter Schmeichel, who was part of the 1998-99 team that won the Premier League, Champions League and FA Cup.
"I'm disappointed and very, very sad. He had always said he would retire when something in his life wasn't right, and it must be something we don't know about."
Former Manchester United midfielder and current Blackpool boss Paul Ince told Sky Sports: "I'm totally shocked. What he's done in unbelievable. You'll never see anyone of his kind again.
"Two weeks ago he was talking about staying on for another two years, so it's a massive, massive shock."
FIFA president Sepp Blatter reacted to the news by describing Ferguson as one of "the greats".
"His achievements in the game place him without doubt as one of the greats," he said. "Will his longevity at the top ever be repeated?"
Ferguson's passion for the game has never diminished, as was demonstrated this season when he led the club to a record 20th league title, two more than the 18 won by Liverpool whom Ferguson vowed to "knock off their perch" when he walked into Old Trafford in 1986.
Ferguson, a horse-racing enthusiast and wine connoisseur, was not an overnight success, experiencing some difficult years before landing the FA Cup in 1990 and the Cup Winners' Cup the year after.
Ending United's 25-year wait for the English title in 1992-93 proved to be the catalyst for two decades of domination despite the challenges of Arsenal, Chelsea and more recently Manchester City.
Famous for his so-called "hairdryer" outbursts of rage at high-profile players, his manic gum-chewing and almost child-like celebration of goals, Ferguson became one of the world's most respected coaches with his philosophy of attacking football and his ability to re-build teams.
His faith in young players launched the careers of David Beckham, Paul Scholes, Gary Neville and Ryan Giggs while his signings of players such as Eric Cantona, Rio Ferdinand, Cristiano Ronaldo and Wayne Rooney proved masterstrokes.
Robin Van Persie, his most recent big-name signing, has scored 25 league goals in his first season at the club as United reclaimed the title from Manchester City with ease.
Off the field Ferguson proved himself the perfect ambassador and diplomat as the club controversially passed into the ownership of the American Glazer family in 2005.
"Alex has proven time and time again what a fantastic manager he is but he's also a wonderful person," Joel Glazer, son of owner Malcolm, said in the club statement.
"His determination to succeed and dedication to the club have been truly remarkable.
"I will always cherish the wonderful memories he has given us, like that magical night in Moscow," he added, referring to the 2008 Champions League final victory over Chelsea on penalties.