The troops have been involved in the fight against Islamist militants in the country since 2013.
Mr Macron said the decision to leave followed a breakdown in diplomatic relations, amid growing hostility from Mali’s governing military junta.
The forces will be re-deployed elsewhere in Africa’s Sahel region.
“We cannot remain militarily engaged alongside de-facto authorities whose strategy and hidden aims we do not share,” Mr Macron told a news conference in Paris on Thursday.
He denied that the mission had been a failure and insisted that France remained committed to combating Islamist insurgencies in the region. He added that Niger had agreed to host some of the withdrawing forces.
“France has played a unifying role in this international mobilisation in favour of the Sahel,” he said. “We will continue to ensure this unifying role.”
The planned withdrawal, which is expected to happen over a four- to six-month period, was announced following meeting of European and African leaders at the Élysée Palace on Wednesday night.
In a statement released on Thursday morning, countries involved in the French-led Takuba Task Force said they had agreed to set out plans on how to remain actively involved in the region, most notably in Niger and the Gulf of Guinea countries, by June.
Colonel Souleymane Dembélé, a spokesman for the ruling junta, shrugged off France’s announcement, telling reporters that while European forces were in the country “terrorism engulfed the entire Malian territory”.
Almost 5,000 French troops are deployed in the Sahel region to combat Islamist insurgencies as part of Operation Barkhane, with around 2,400 of those located at three bases in northern Mali.
But relations between France and Mali, which is one of the world’s poorest nations, have deteriorated since the army first seized power in a coup in August 2020.
And tensions increased further last month when the junta reneged on an agreement to arrange elections in February and vowed to hold power until 2025, ultimately leading to the expulsion of the French ambassador.
In December, more than a dozen Western nations also condemned the deployment of mercenaries from the Russia-based Wagner group to Mali.
The group has been involved in several major conflicts, including in Syria, Mozambique, Sudan and the Central African Republic (CAR). A BBC investigation found links to war crimes in Libya.
Mr Macron warned on Thursday that the group had “essentially come to secure their economic interests and the junta itself”.
News of the French withdrawal was met with mixed reactions in Mali.
One man told the BBC that it would “bring peace in the north of our country because Russia and Wagner will certainly support our army”, while another described the French intervention in Mali as “a failure”.
However, others expressed fear that the situation was “worsening”.
“Just yesterday, there was an attack in the northern part of Mali… Our soldiers are in the central part. They are saying that the army is gaining ground. But only in the centre of the country. What about other regions?” one concerned local told the BBC.