While coach Gary Street must now look for a new skipper, Spencer hopes to continue the success he has achieved for her country.
The Bristol No. 8 said: "I am very determined to keep playing for England and to perform to the best of my abilities.
I believe that I still have the potential to improve as a player and will be working very hard to make new gains."
Spencer, 31, won her first cap in 2007, and is extremely proud of her accomplishments as England captain.
She said: "There are many reasons why I would dearly love to continue being England captain, but the time is right for me to step down."
Street added: "I would personally like to thank Catherine for the excellent way she has conducted herself on and off the pitch.
"She has been a fantastic role model for any aspiring player."
England's Six Nations campaign kicks off against Wales next month, where they hope to win the coveted title for the sixth consecutive time.