News comes as plans for the European Super League lie in tatters with Chelsea and Manchester City deciding to pull out of the widely-condemned breakaway competition.
Woodward was a key figure in the controversial plans, which has now left each of the 12 founding members humiliated after their association with it.
Standard Sport initially reported that contrary to initial reports of an imminent resignation, Woodward would stay on until the end of the 2021 - and the club confirmed as such at the end of trading on the New York Stock Exchange.
It is understood United opted to bring the announcement forward for fear of leaks and it is claimed the decision has nothing to do with the Super League and the decision was an amicable one with owners, the Glazers.
But it is sure to be linked to his role in the ill-fated breakaway, which threatens to permanently sour the relationship between the club and its fanbase.
United supporters have long-held animosity towards their American owners following the debt they leveraged in order to buy the club back in 2005.
Co-chairman Joel Glazer was announced as vice chairman of the Super League - and its likely collapse will be of personal embarrassment to him.
Woodward has been widely criticised by United fans for his running of the club since taking over from David Gill in 2013.
His refusal to appoint a director of football led to further criticism - but he will leave having eventually filled that position with an existing member of staff in John Murtough.
It remains to be seen if he will stay in position until the end of the year, or if he will come under pressure to leave early in the wake of the Super League.
Fans protested outside of his house in 2019 - turning up at the gates of his Cheshire home wearing balaclavas and holding flares.
But under Ole Gunnar Solskjaer United are set to record their equal highest Premier League finish since Sir Alex Ferguson’s retirement - as runners-up to champions-elect City.
They previously managed that under Jose Mourinho in 2018