The president wrote a "proclamation," which was read out on television and radio by his personal secretary saying he had suffered from an "accident," and that he had undergone surgery.
President Castro, who has been Cuba’s leader since 1959, passed power to his brother Raul, the minister of defence, 75.
Mr Castro will turn 80 on August 13.
He said in the statement, that the intense agenda of a recent trip to Argentina and to eastern Cuba touched off the need for complex surgery.
Castro's statement
"Working day and night and barely sleeping has taken its toll on my health, which has withstood everything, has undergone extreme stress and has become brittle," he said.
"That touched off an acute intestinal distress with sustained bleeding, which forced me to undergo delicate surgery," he said.
The operations will "force me to forgo my responsibilities and duties for some weeks," which is why he said he handed over power.
“I do delegate, provisionally, my duties as first secretary of the Central Committee of the Communist Party in Cuba, to the second secretary, comrade Raul Castro Ruz," he said.
"I do delegate, provisionally, my duties as commander in chief of the heroic Revolutionary Armed Forces in the hands of the aforementioned comrade, Army General Raul Castro Ruz."
"I do delegate, provisionally, my duties as president of the Counsel of State and of the government of the Republic of Cuba to first vice president, comrade Raul Castro Ruz," said the text read by his secretary Carlos Valenciaga.
US 'monitoring' Cuba
The White House said it was keeping an eye on Cuba after president Castro’s announcement .
"We are monitoring the situation. We don't want to speculate on his health," Peter Watkins, a White House spokesman, told AFP.
"We will continue to work for the day of Cuba's freedom."
The United States has enforced a four-decade embargo against Cuba.
Hundreds celebrate in Miami
Hundreds of people have celebrated in Miami's Little Havana, convinced of the imminent demise of the Cuban president.
The growing crowd banged pots and pans, honked car horns, waved Cuban flags and chanted "Viva Cuba Libre" - "Long Live Free Cuba."
Some tried to contact friends and relatives in Cuba by cellphone.
"It is what we've been waiting for, said Estrada, a handyman who fled Cuba 14 years ago.
"It is a wonderful moment for democracy to flourish in Cuba," Mercedes Armas-Bach, a Cuban-American judge, said.
She was unfazed by the fact Castro made it clear in a statement read on Cuban television that he expected to be back on the job within weeks.
Ninoska Perez, a leading anti-Castro activist in Miami, said it was quite possible Castro was in a critical state, or even dead.
"They may be trying to gain time," she said in reference to Cuban authorities. "If he is dead, they will announce it when they are ready," she told AFP, adding that "there is much discontent in Cuba."
The largely anti-Castro Cuban exile community in Miami is estimated at more than 650,000.
Castro recently travelled
Mr Castro had recently spent three days travelling in the eastern part of Cuba, the provinces of Bayamo and Holguin, to preside over the celebration of the 53rd anniversary of the assault on the Moncada Quarters, which marked the beginning of the Cuban revolution.
Speculation about Mr Castro's health peaked after a fall in 2004, when he injured his right arm and left knee. Last November, the Cuban leader, who stopped smoking cigars in 1985 and now exercises every day, said he had recovered from these injuries.
Mr Castro leads the only communist, one-party regime in the Americas and has lashed out at a US plan to "assist" in a transition once he no longer holds power.
Earlier this month, National Assembly speaker Ricardo Alarcon told AFP Castro "has been given this privilege: He is an extraordinarily healthy man. He has always been and remains healthy, although that angers (US President) George W. Bush."