"I've made the very difficult decision not to return for another season. I had an incredible time doing the show and I love the other judges and I am so proud of my teens but it's time for me to get back in the studio," Spears said in a media statement released Friday.
"Watching them all do their thing up on that stage every week made me miss performing so much! I can't wait to get back out there and do what I love most."
According to Spears' representatives, Fox had been informed of her decision prior to the announcement, Extrareported.
Spears is allegedly looking to finish up her eighth album and possibly go on tour again.
"It's pretty hard to quit a show you weren't being asked back to," a The X Factor insider told E! News.
Production insiders also told RadarOnline that show executives had been discussing the third-season judging panel with Simon Cowell over the holidays and Spears was not a part of the conversation.
"Britney did her best, and it's fair to say she was a lot better in the show -- and especially during live shows -- than many critics had expected or predicted, but the writing was always on the wall," a source told the website.
"It was obvious a while before the end of last season that she and [fellow judge] L.A. Reid weren't going to make the cut this time and they both knew that."
Although Reid recently confirmed his own departure from The X Factor, stating his loyalty lies with his record label over another season of the reality singing competition, the source added that the producer -- just like Spears -- wanted to simply beat Fox to the punch.
"A pro knows when to take the lead and make his own exit first," said the RadarOnline source.
While Fox hasn't announced anything publicly, Fox president Kevin Reilly was noncommittal when asked whether Spears would return to The X Factor on Tuesday.
"For next year, I don't know," Reilly told reporters, according to E! News.
Reilly did, however, say "yeah" when asked if he actually wanted Spears to come back.