The Scot, who had guided the Red Devils back to the summit of English football after his 1986 appointment, had been locked in a dispute with some members of the board, as well as having hinted at health problems.
Discussing the rift with the club's television channel MUTV, Ferguson said at the time: "The decision has been taken. I'm going to leave the club. I'm disappointed with what has happened because I was hoping something would be sorted out. It hasn't happened as I thought it would and that's all there is to it."
News of their manager's retirement, coupled with speculation that Sven-Goran Eriksson had been selected as the new boss, appeared to hamper the United players during the first part of the 2001-02 campaign, with three successive Premier League defeats to Chelsea, Arsenal and West Ham United seeing the club slump to ninth in the table.
What they didn't know was that Ferguson was in the process of having a change of heart - he wanted to stay. He informed those closest to him of his decision over Christmas, before going on to make that news public on this day 12 years ago.
Ferguson later admitted that his wife Cathy had been behind his U-turn, having told him: "One, your health is good. Two, I'm not having you in the house. And three, you're too young anyway."
His desire to stay at Old Trafford brought with it an upturn in results for United, who ended the campaign in third spot and reached the semi-finals of the Champions League, where they were knocked out by eventual runners-up Bayer Leverkusen.
Trophies would arrive in the seasons that followed, though, including six Premier League titles, one FA Cup, three League Cups and a Champions League.
Perhaps it was not such a surprise, but when Ferguson announced his retirement in the summer of 2013 at the age of 71, this time for good, it still left a number of people shocked.