The UVF declared a ceasefire 13 years ago
It also said it will keep its weapons, but has put them "beyond reach".
However, the arms decommissioning body has said this did not meet the requirements set out in government legislation.
During the Troubles in Northern Ireland, the loyalist UVF murdered more than 500 people.
Its campaign also claimed the lives of 33 people in bomb attacks in Dublin and Monaghan in 1974.
The UVF statement said its weapons would be stored in a number of arms dumps "under the control of the UVF leadership, but not accessible for use by members".
The statement was read by Gusty Spence, who helped found the modern day UVF in 1966.
It declared a ceasefire 13 years ago, but since then its members have been blamed for more than 20 murders.
Speaking in Fernhill House in west Belfast on Thursday, Gusty Spence said that from midnight, the UVF and its associated group, the Red Hand Commando, "will assume a non-military, civilianised role".
As part of this move, he said the organisation had implemented a number of measures to deal with what it called the "transformation from a military to a civilian organisation".
We are prepared to meet with the UVF representative to discuss how we can work together in dealing with arms
Independent International Commission on Decommissioning
UVF statement in full
These include an end to all recruitment, training and targeting, and all so-called "active service units" have been de-activated.
On the issue of weapons, the statement said these had been put beyond reach and that the Independent International Commission on Decommissioning led by General John de Chastelain had been informed.
However, it did not elaborate on what this means, or whether the general will be allowed to verify its claim.
The Progressive Unionist Party's Billy Hutchinson said: "People should be seeing this (statement) as a positive thing rather than a negative thing."
'Constitutional question'
The statement also condemned any criminal activity by its members, and said they should "cooperate fully with the lawful authorities in all possible instances".
The UVF has accepted that "the IRA's war is over" and said it was making this move now because it was satisfied that Northern Ireland's place within the United Kingdom was now safe.
The statement said: "We have taken the above measures in an earnest attempt to augment the return of accountable democracy to the people of Northern Ireland and as such, to engender confidence that the constitutional question has now been firmly settled."
There was also a call to the government to tackle the threat from republican dissidents, and a warning that these activities could "provoke another generation of loyalists toward armed resistance".
Gusty Spence helped found the modern day UVF in 1966
However, the Independent International Commission on Decommissioning urged the UVF to work with it to destroy its weaponry.
It said it welcomed the statement, but was "concerned by their intention to deal with their arms without the involvement of the IICD".
Northern Ireland Secretary Peter Hain welcomed the move as "a further welcome confirmation that Northern Ireland is emerging into a new and positive era".
Irish Prime Minister Bertie Ahern said the UVF should work with the decommissioning body "with a view to full decommissioning".
Sinn Fein's John O'Dowd said: "This is a welcome statement if it signals a recognition of the new political reality where there is no room for armed or violent actions."
The DUP's Peter Robinson said: "The decision that the UVF is moving to a civilian mode is undoubtedly a major development and it is critical that all paramilitary groups follow this clear path."
The SDLP's Patsy McGlone said there was "a yawning credibility gap for the UVF on the issue of targeting and intelligence-gathering".
The Ulster Unionist Party's Fred Cobain said: "We hope it signals the destruction of materials of war so that they cannot again be used to inflict harm."
The PSNI said: "Whilst we welcome today's announcement, individuals and organisations will be judged by their actions - actions always speak louder than words."
Northern Ireland as part of the British Isles.Northern Ireland is shown in orange, the rest of the United Kingdom is peach, and Ireland is white.
The Northern Ireland loyalist paramilitary group, the Ulster Volunteer Force (UVF) intends to end its decade-long campaign of violence and terror and will disarm, making it the first loyalist paramilitary to do so.


However, unlike the Provisional Irish Republican Army, the UVF will not fully decommission weapons. Instead the illegal organization will put weapons "beyond reach" of ordinary members in secure caches only known to UVF leadership. 

The group, considered a terrorist group in both the United States and United Kingdom issued a statement, read by Gusty Spence, a founding member of the UVF, which stated that "as of 12 midnight, Thursday 3 May 2007, the Ulster Volunteer Force and Red Hand Commando will assume a non-military, civilianised, role."

It also added, "All recruitment has ceased; military training has ceased; targeting has ceased and all intelligence rendered obsolete; all active service units have been deactivated; all ordinance has been put beyond reach and the IICD instructed accordingly." 

However, according to the Independent International Commission on Decommissioning (IICD), this does not meet the requirements set out in government legislature. Although it welcomed the news of disarmament, the Commission said it was "concerned by the UVF's intention to deal with their arms without the involvement of the IICD".

Irish Prime Minister Bertie Ahern suggested the UVF work with the Commission "with a view to full decommissioning". Sinn Fein welcomed the news of UVF's disarmament. "This is a welcome statement if it signals a recognition of the new political reality where there is no room for armed or violent actions," said John O'Dowd of Sinn Fein.

The British Prime Minister's office expressed cautious optimism over the UVF announcement. "We need to see how today's announcement is translated into action," said a spokesman for Prime Minister Tony Blair.

The group has been on a cease-fire since 1994 in response to the IRA ceasefire. The group was responsible for 427 deaths during the violent period in Northern Ireland known as the "the Troubles" some of which was notoriously violent, which included a group of members known as the "Shankill Butchers" who committed a series of grisly murders of Catholics in Belfast and the Dublin and Monaghan bombings, which claimed the life of 33 victims and was the deadliest terrorist incident during the Troubles to happen in the Republic of Ireland.