The decision is set to have far-reaching political and security consequences for the region, including in neighbouring Iraq and also in Syria, where Kurdish forces are allied with US forces.
More than 40,000 people have been killed in the conflict since the PKK launched its insurgency in 1984.
It is designated a terrorist group by Turkey and its Western allies.
"The PKK has completed its historic mission," the group said on Monday, according to the Firat news agency, which published what it said was the closing declaration of a congress that the PKK held last week in northern Iraq where it is based.
The PKK held the congress in response to a call in February from its jailed leader Abdullah Ocalan to disband.
"The PKK 12th Congress decided to dissolve the PKK'S organisational structure, with the practical process to be managed and carried out by Leader Apo, and to end the armed struggle method," the statement said, using Ocalan's nickname.
"The PKK struggle has broken the policy of denial and annihilation of our people and brought the Kurdish issue to a point of solving it through democratic politics."
The PKK's decision will give President Recep Tayyip Erdogan the opportunity to boost development in the mainly Kurdish southeast, where the insurgency has handicapped the regional economy for decades.
Omer Celik, spokesman for Erdogan's ruling AK Party, said the PKK's decision to dissolve was an "an important step toward a terror-free Turkey".
Turkey's foreign ministry did not immediately comment on the announcement, which Ankara had been expecting.
There have been intermittent peace efforts over the years, most notably a ceasefire between 2013 and 2015 that ultimately collapsed.
