The 'Heart Attack' hitmaker has sat on the talent show's judging panel for two years, but reports earlier this week suggested she was ready to move on, said The Hollywood Reporter.
Now Lovato has officially announced her departure, revealing she plans to hit the studio to start work on a second album.
"I started the show being a singer and a musician, and so I'm going to go back to that. It's been really great, but I'm so excited for 2014. I'm going to dedicate it completely and entirely to music - touring and making a new album. Possibly releasing one," she said.
The music mogul has already confirmed 'The X Factor' will return to US TV screens for its fourth season in 2014, although it is not yet known whether he will remain on show.
The future of fellow judges Kelly Rowland and Paulina Rubio is also in doubt.