"End your sit-in before the gates of the Green Zone, with thanks and appreciation to you," Sadr said in televised remarks, calling on his followers to make an organised withdrawal.
The announcement came after Prime Minister Haider al-Abadi presented a proposed lineup for new cabinet ministers to parliament -- a measure which Sadr had demanded.
Sadr's supporters began the sit-in -- which he himself later joined -- on March 18 at entrances to the Green Zone, which is home to parliament, the prime minister's office and various foreign embassies.
His influence ebbed after the 2011 US pullout but he retained strong support among the poor and is now casting himself as the champion of the fight against graft.