Councillor Marcus Hart will become acting leader until a successor is appointed at an extraordinary meeting of the council to be held within 21 days.
Mr Campion said: "It has been an immense honour to have served the district council as its leader for nearly seven years.
" I am very proud to have been involved with some key projects including centralising the administrative offices onto one site saving the taxpayer £500k per year, the redevelopment of the former British sugar site, the delivery of a new crematorium and cemetery, £1m additional monies to support the economy in response to the recession to name but a few.
"I will continue to represent my ward constituents and support the vital work the district council does to support the residents in Wyre Forest.”
Mr Campion is the longest continuously serving leader of the council in its 40-year history. He was elected to the authority in 2004 and became its leader in May 2007.