Joy helped develop many Sun technologies, including its Java software, SPARC microprocessor architecture and the Solaris operating system.
Greg Papadopoulos, currently Sun's chief technology officer and executive vice president, will take over Joy's responsibilities. A Sun representative said the 48-year-old Joy is taking time to consider his next move and has no definite plans.
"Bill will continue to be an inspiration to all innovators," Scott McNealy, Sun's chief executive, said in a statement.
Joy co-founded Sun, originally an acronym for Stanford University Network, with McNealy in 1982. Before that, Joy was the designer of the Berkeley version of the Unix operating system and helped pioneer the concept of open source.
More recently, Joy found himself at the center of controversy after he wrote a Wired magazine article on the challenges posed to mankind by new technologies such as nanotechnology, robotics and genetic engineering.
Joy's departure comes after more than two decades of work at the Santa Clara, Calif., high-tech stalwart.
"For 21 years, I've enjoyed the opportunities for innovation provided to me at Sun, but I have decided the time is now right for me to move on to different challenges," Joy said in a statement.
Daryl Plummer, an analyst with Gartner, said the overall impact on Sun due to Joy's departure should be "relatively small." Joy had most recently worked on several projects that have yet to find success as products, including, a technology for connecting distributed computing systems, and Jxta, a peer-to-peer technology.
But some customers might perceive Joy's resignation as a sign of overall financial troubles within the company. "It's just like when Ed Zander (Sun's former president and chief operating officer) left. Some see that as rats deserting a sinking ship," Plummer said. "Joy has been in on every innovative idea since Sun was founded."
That, in turn, could further hurt Sun's already rocky reputation in the marketplace. "A lot of (Sun) customers are looking for a reason to pick someone else," Plummer said. He sees IBM as the company likely to pick up new business, should Sun customers bolt.
Plummer, however, said he does not expect many Sun customers to take that route.