Hughes told The Associated Press that she plans to quit her job as undersecretary of state and return to Texas, although improving the world's view of the United States is a "long-term challenge" that will outlast her.
"This will take a number of years," Hughes said in an interview Tuesday.
White House press secretary Dana Perino said Hughes told Mr. Bush - her "very, very close friend" - as far back as the summer that she would need to be back home in Texas by the end of the year. The president was sad to hear the news, but understood, Perino said.
She praised Hughes' performance, despite persistently low opinions of the United States globally, particularly in the Muslim countries where she was supposed to concentrate her efforts.
"She has done quite a great job of transforming public diplomacy at the State Department and established new initiatives and programs that will serve us well after she's gone," Perino said of Hughes. "We are making progress. I know that we have a long way to go."
Announcing Hughes' decision to leave the department in mid-December, Secretary of State Condoleezza Rice said she had accepted the resignation "with a great deal of sadness but also a great deal of happiness for what she has achieved" and with the understanding that she would continue to work on several projects.
Rice said that Hughes had made public diplomacy "strong and central" to U.S. foreign policy and had exceeded expectations in the job.
"I knew that she would bring a great dedication and great commitment to all that we're trying to do," Rice said. "She has done just a remarkable job."
Mr. Bush and Rice had picked Hughes two years ago to retool the way the United States sells its policies, ideals and views overseas. A former television reporter and media adviser, Hughes' focus has been to change the way the United States engages and responds to criticism or misinformation in the Muslim world.
"Negative events never help," Hughes said when asked how events like last month's shooting of Iraqi civilians by private U.S. security guards in Iraq affects the way the world sees the United States.
Heading the broad category of U.S. outreach known as public diplomacy, Hughes sent Arabic speakers to do four times as many interviews with Arabic media as in previous years and set up three rapid public relations response centers overseas to monitor and respond to the news. She nearly doubled the public diplomacy budget, to nearly $900 million annually, and sent U.S. sports stars Michelle Kwan and Cal Ripken Jr. abroad as unofficial diplomats.
Polls show no improvement in the world's view of the U.S. since Hughes took over. A Pew Research Center survey earlier said the unpopular Iraq war is a persistent drag on the U.S. image and has helped push favorable opinion of the United States in Muslim Indonesia, for instance, from 75 percent in 2000 to 30 percent last year.
Hughes' performance drew mixed reviews in the Muslim world. She got credit for hard work and frequent travel but was prone to gaffes such as vastly overstating Saddam Hussein's use of poison gas against his people before he was deposed by a U.S.-led invasion in 2003.
Hughes said the Iraq war was usually the second issue that Muslims and Arabs raised with her, after the long-standing conflict between Israel and the Palestinians. Hughes said she advised Mr. Bush and Rice two years ago that U.S. help in ending the six-decade old fight over Israel would probably do more than anything else to improve the U.S. standing worldwide.
This is Hughes' second departure from the Bush administration. She was among Mr. Bush's closest confidantes during his first term before leaving the White House in 2002. She never fully left Mr. Bush's employ, serving as an offsite strategist and adviser until she returned to Washington to take the State Department job in 2005.
Hughes had been splitting her time between Texas and Washington.
She worked with Mr. Bush since the 1990s, first as director of communications while he was governor of Texas, from 1995 to 2000.