Williams made the announcement Monday in a blog post in which he said, "I am most satisfied while pushing product direction. Building things is my passion, and I've never been more excited or optimistic about what we have to build."
Prior to Twitter, Costolo had worked at Google (GOOG) after the search giant bought his company FeedBurner.
In his blog post, Williams noted that Twitter now has 300 employees, up from 20 two years ago. Over that time, Twitter has grown from 3 million registered users to more than 160 million. Some 90 million tweets are posted daily.