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The Pope will hold a final general audience in front of an estimated 150,000 pilgrims in St Peter's Square on Wednesday, the eve of his resignation.
In an emotional farewell speech, Benedict recounted how when he was asked to be pope eight years ago, he had prayed for God's guidance.
"And the Lord has really driven, I was close, I could feel his presence every day," he said.
"It was a part of the journey of the Church that has had moments of joy and light, but also moments that were not easy."
The Church is like a boat that passes through stormy seas, but God will "not let her sink," he said.
He thanked the cardinals, the clergy in Rome, Vatican officials and priests worldwide, as well as their congregations, saying "the heart of a pope extends to the whole world."
He had taken the step of resignation well aware of its seriousness and novelty, but also "with a deep peace of mind," he said.
"In recent months, I felt that my strength had decreased, and I asked God earnestly in prayer to enlighten me with his light to make me take the right decision not for my sake, but for the good of the Church," he said.
"Loving the Church also means having the courage to make tough choices," he said, as he called on the faithful to pray for him and the new pope.
His life in retirement will be "simply a return to the private place. My decision is to forgo the exercise of active ministry, not revoke it. In order to return to private life, not to a life of travel, meetings, receptions, conferences and so on," he said.
After Benedict XVI steps down on Thursday, he will become known as "pope emeritus".
There has been no papal resignation since Pope Gregory XII abdicated in 1415 and the surprise announcement of Benedict's abdication has required the rules of electing a successor to be changed to allow the next pope to be chosen before Holy Week, which leads up to Easter.
On Tuesday, it emerged that Benedict would be known as "pope emeritus" and would retain the honorific "His Holiness" after his abdication.
He will also continue to be known by his papal title of Benedict XVI, rather than reverting to Joseph Ratzinger.
He will wear his distinctive white cassock without any cape or trimmings.
He will surrender his gold ring of office, known as the fisherman's ring, and his personal seal will be destroyed in the same way as when a pope dies.
Benedict will also give up wearing his specially-made red leather loafers, instead wearing brown shoes hand-made for him by a craftsman during a brief visit to Mexico last year, the Vatican said.
The title "emeritus" is used when a person of status, such as a professor or bishop, hands over their position so their former rank can be retained in their title.
The Pope is to spend his final hours at his Vatican residence saying farewell to the cardinals who have been his closest aides during his eight-year pontificate, says the BBC's David Willey at the Vatican
His personal archive of documents will be packed up and, at 20:00 (19:00 GMT) on Thursday, the Swiss Guard on duty at his Castel Gandolfo residence will be dismissed, to be replaced by Vatican police.
This will mark the formal end of his papacy and the beginning of the period of transition to his successor, due to be chosen next month.
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