"Undersecretary Shannon has given a lifetime of service to the American people @StateDept," Nauert said in a Twitter message. "He will stay on until a successor is named to ensure a smooth transition."
Shannon, who started his career in the State Department in 1984 and has served under six US presidents, has made a great contribution to the US diplomacy.
According to the diplomat, the reasons behind his retirement are personal and not political.
As undersecretary of state for political affairs, the State Department's third-ranking official, Shannon has played a leading role in US diplomacy on Russia, leading US delegations to the country and holding several meetings with Russian Deputy Foreign Minister Sergey Ryabkov.
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In September the two top diplomats met in Finland for a discussion on a range of bilateral topics, including as the US decision to shut down Russian diplomatic facilities in Washington, DC and New York, cybersecurity and the countries' compliance with the Strategic Arms Reduction Treaty.