The four-man Australian singing and dancing outfit, famed for their colourful jumpers or "skivvies", said three of their original number would step into "backstage creative roles" at the end of a 2012 tour.
"We've been entertaining children around the world for 21 years now and it has been a fantastic ride in our Big Red Car," the band said in an open letter to fans.
"Singing, dancing and making music with you all has been great fun but it has also meant spending a long time away from our own families and friends.
"We tour eight months of the year and have performed more than 6,000 shows since The Wiggles began, and Murray, Jeff and Greg have decided it's time to spend more time at home."
The band said it would kick off a farewell tour in Singapore at the end of May which would take in Britain, the United States, Canada and New Zealand before returning for their final shows in Australia in November
Jeff Fatt, Murray Cook and Greg Page -- the original Purple, Red and Yellow Wiggles -- would then hand over their trademark pullovers to a "new generation of performers" which would include a woman, Emma Watkins, as the Yellow Wiggle.
"I've been a big fan of The Wiggles since I was a little girl, so it's a huge privilege to be invited to wear one of the skivvies and perform for a whole new generation of children," said 22-year-old Watkins.
The new trio were hand-picked by the band as successors after touring with the show for several years as Wiggles sidekicks Dorothy the Dinosaur, Captain Feathersword and Wags the Dog.
Blue Wiggle Anthony Field, the driving force behind the outfit, will remain on stage and his new colleagues -- Watkins, Lachlan Gillespie, 26, and Simon Pryce, 40 -- said they would be glad to have his "tremendous experience" to draw on.
Fatt, Cook and Page would continue to work on shows behind the scenes.
The group welcomed Page back to the fold in January after a five-year absence due to illness and they said it was great to have him back with them on stage for their finale.
"It's been so great having Greg back with us so far this year, and to finish our time on stage all together again seems so fitting," said Fatt, 58, who was last year fitted with a pacemaker.
Added Page: "With Murray and Jeff's decision to stop performing at the end of the year it's a nice sense of closure to also end my time on stage during the final tour with all the original members of the group."
First formed in 1991 as Page, Cook and Field studied to become pre-school teachers, The Wiggles have become a huge worldwide success, achieving acclaim with their albums, videos, television series and concert appearances.
They are among the highest-paid figures in Australian entertainment.