The West Yorkshire Chief Constable made the decision after last month's report revealed he was largely responsible for deflecting the blame onto Liverpool fans for the disaster
Bettison's decision comes just over three weeks after the findings from the report first emerged and after he was subsequently referred to the police watchdog (the IPCC) regarding his conduct following the 1989 disaster.
At the time of the incident he was acting as a South Yorkshire Police inspector and had attended the game primarily as a spectator for the FA Cup semi-final between Liverpool and Nottingham Forest and later took part into an inquiry into the disaster.
Bettison announced in a statement that he intends to retire on 31 March 2013 after accepting that he wanted to act in the best interests of the police force.
In his statement, the 56-year-old said: "Recent weeks have caused me to reflect on what is best for the future of policing in West Yorkshire and I have now decided to set a firm date for my retirement."
His exit will help the IPCC to launch an investigation into his role in how the police dealt with the Liverpool fans but Bettison insists he would support any such inquiry as more answers are sought.
He added: "I hope [my departure] will enable the Independent Police Complaints Commission to fully investigate allegations that have been raised about my integrity.
"They need to be fairly and fully investigated and I welcome this independent and formal scrutiny."
The government papers were made public some 23 years after the disaster unfolded. Last month several complaints were filed against Bettison - claiming he had given misleading information in the quest for justice - while also leading a diversion effort away from the police errors.
His retirement marks the end of a 40-year association with the Yorkshire Police forces.