Hubbard, assistant to the president for economic policy, will submit a letter to the president Wednesday to make official his decision to leave the White House after three years, according to White House press secretary Dana Perino.
His departure, by the end of the year, continues an exodus of key Bush aides and confidants. Earlier this month, Fran Townsend, Bush's terrorism adviser, announced she was stepping down after 4 1/2 years. Top aide Karl Rove, along with press secretary Tony Snow, Attorney General Alberto Gonzales, Defense Secretary Donald Rumsfeld and senior presidential adviser Dan Bartlett, have already left.
Hubbard, of Indiana, was a low-profile economic adviser to the president whose strength came from his closeness to Bush. The two both attended Harvard University. Hubbard also has close ties with Treasury Secretary Henry Paulson.
Hubbard accompanied Paulson on some of his trips to China to lend White House support to efforts to get China to reform its economy and narrow the huge trade imbalance between the two nations.
On Tuesday, Hubbard said U.S. recession risks have increased, but the "real America" is still doing well.
"Obviously the chances of a recession are higher now than they were a year ago, but we still think it's less than 50-50," Hubbard told CNBC television in an interview.
"We obviously have problems in the housing sector and we have problems in the financial sector, but ... real America is doing just fine," he said.
Among other issues, Hubbard has been deeply involved in the debate over the State Children's Health Insurance Program and Bush's proposal for a major shift in tax policy to, for the first time, treat health insurance costs as taxable income.
The National Economic Council was created in the Clinton administration to coordinate economic policy. The first NEC director was Robert Rubin, who went on to become Clinton's Treasury secretary.
Hubbard took the post at the beginning of Bush's second term, when the administration had high hopes for achieving success on a number of major issues such as addressing Social Security's funding problems and overhauling the tax code. However, as Bush became mired in problems involving the Iraq war, his domestic initiatives failed to make headway in Congress.
Hubbard first met Bush when they were both attending Harvard's business school in the 1970s, getting MBA degrees. Hubbard later became president of E&A Industries, an Indianapolis investment firm.
He has not yet announced his future plans.
Hubbard, who is married and has three children, has owned and operated several businesses. He served in the Bush-Quayle administration as executive director of a council on competitiveness.