Updated: 4:38 p.m.

Senate Appropriations Chairman Robert Byrd (D-W.Va.) decided Friday to bow to his leadership’s wishes and give up his powerful committee perch, a surprise move that concludes his 20-year reign as the panel’s top Democrat.

Democratic leaders have been struggling for months over how to displace the 90-year-old Byrd from his chairmanship and unsuccessfully tried to encourage him to relinquish the gavel on more than one occasion.

Senate Democratic aides said Byrd made the decision on his own and did not broker a deal with Senate Majority Leader Harry Reid (D-Nev.). Still, Byrd is expected to retain some of his plum office space in the U.S. Capitol by virtue of his continued position as President Pro Tempore. That post puts him third in line for the presidency behind the vice president and the Speaker. Byrd also is likely to be deemed chairman emeritus of the Appropriations panel.

“I want to stress that this is a decision I made only after much personal soul-searching, and after being sure of the substantial Democratic pickup of seats in the Senate,” Byrd said in a statement. “I am now confident that stepping aside as Chairman will not adversely impact my home state of West Virginia.”

Since this spring, Byrd has forcefully pushed back against the attempts of Reid and other Democrats to wrest the chairmanship from him. After the issue of his removal came up at a Democratic leadership meeting in April, Byrd made a round of calls to Senators to shore up support for his position.

Most recently, the West Virginia Democrat’s office responded to stories speculating on his ouster by stating that Byrd was looking forward to being chairman under President-elect Obama.

In his Friday statement, Byrd said he was pleased that the chairmanship would now likely fall to his friend, 84-year-old Sen. Daniel Inouye (D-Hawaii) who is next in seniority. Inouye, while slightly younger than Byrd, isn’t without some detractors who fear he may lack an aggressive touch as the new chairman. Yet most Democrats felt Byrd wouldn’t volunteer the job unless Inouye was his successor.

“Senator Daniel Inouye has stood in line for many years and now his time has come,” said Byrd, whose health has been deteriorating in recent years.

“God willing, I will continue to serve on the Appropriations Committee,” he said. “I will continue to chair the Homeland Security Subcommittee, and I will work to help my state and the people of our great country in those roles.”

Byrd’s leadership on Appropriations came into question over the last few years, particularly as his health worsened. Byrd, who has been in and out of the hospital this Congress, often relied on other committee members to help handle his duties.

At times, Byrd’s behavior in hearings and on the floor has even been erratic, and his staff jealously guarded Senators’ access to him. Plus, many Democrats said the Senate’s prerogatives were disadvantaged by his inability to even attend high-level bicameral leadership meetings on the state of appropriations bills, when his aggressive counterpart, House Appropriations Chairman David Obey (D-Wis.), did.

Though they were plotting his removal, Senate Democrats said they were concerned that Byrd — who served as Majority Leader in the 1980s and is considered the “Dean of the Senate” — leave the post with dignity and not be embarrassingly forced out. Byrd continues to be one of the chamber’s most beloved Members.

He will continue as the panel’s leader until January when the 111th Congress begins.

In a statement Friday afternoon, Reid thanked Byrd for his service as chairman, and said the caucus has accepted his decision to step down. Reid confirmed that Inouye would take over when the next Congress begins next year, saying that “Byrd’s decision was eased by the knowledge that the gavel will continue to be in such capable hands.”

“Last year, Senator Byrd cast his 18,000th Senate vote, by far a record in the history of our institution,” Reid said. “Every day of his Senate career has been dedicated to strengthening the republic that he loves with all his heart. I know I speak for all of my colleagues when I say that we look forward to Senator Byrd’s continued leadership in the 111th Congress.”