Bush, who rushed for 1,740 yards and 16 touchdowns that season, becomes the first player in the 75-year history of college football's most prestigious individual honor to surrender the award.
"One of the greatest honors of my life was winning the Heisman Trophy in 2005," Bush said. "For me, it was a dream come true. But I know that the Heisman is not mine alone. Far from it. I know that my victory was made possible by the discipline and hard work of my teammates, the steady guidance of my coaches, the inspiration of the fans, and the unconditional love of my family and friends. And I know that any young man fortunate enough to win the Heisman enters into a family of sorts. Each individual carries the legacy of the award and each one is entrusted with its good name."
"It is for these reasons that I have made the difficult decision to forfeit my title as Heisman winner of 2005."
In a statement released through the New Orleans Saints, where Bush has played professionally for the past five seasons, the former San Diego Helix standout continued to deny any wrongdoing in his time at USC but said it was in his best interests to move on.
"The persistent media speculation regarding allegations dating back to my years at USC has been both painful and distracting," Bush said "In no way should the storm around these allegations reflect in any way on the dignity of this award, nor on any other institutions or individuals. Nor should it distract from outstanding performances and hard-earned achievements either in the past, present or future."
Bush said he would work to advance the values of the Heisman Trophy and educate other student-athletes to prevent them from making the same mistakes.
"I will forever appreciate the honor bestowed upon me as a winner of the Heisman," he said. "While this decision is heart-breaking, I find solace in knowing that the award was made possible by the support and love of so many. Those are gifts that can never be taken away."
The Heisman Trust, which oversees the award, was scheduled to hold its monthly meeting Tuesday and expected to consider the results of an internal investigation that could have led to Bush being stripped of the award.
USC athletic director Pat Haden praised Bush's decision in a press conference on the steps of Heritage Hall, which still showcased Bush's Heisman Trophy fewer than 100 days ago.
"I think it was a very noble thing for Reggie to do. This was clearly Reggie's decision and in my own personal view is he made the right decision," Haden said.
"It was a thoughtful decision by Reggie. He took his time and thought it out well. We had no control over what the decision was going to be."
USC announced it would return its copy of the award in July.
"At the end of the day, I think we did the right thing to sending it back and he did the right thing so I think we can be proud of that," Haden said.
Bush and his family are alleged to have accepted hundreds of thousands of dollars in impermissible benefits, including rent-free housing, travel and cash, during his time at USC.
The NCAA ruled in July that Bush was ineligible for the final 15 games of his college career, including the 2005 Orange Bowl, when USC won the BCS championship by defeating Oklahoma, 55-19, through the 2006 Rose Bowl, when the Trojans lost to Texas, 41-38.
USC was ordered to disassociate with Bush. The university was also placed on four years probation by the NCAA and hit with a two-year bowl ban and the loss of 30 scholarships over three years.
Haden admitted this last step by Bush could change his legacy in the minds of some USC fans.
"For some people it will," Haden said. "Reggie Bush was a fantastic football player, nobody can deny that, one of the most exciting guys to play here, fun guys to watch play here. By his own admission today, he made some mistakes."
For senior linebacker Malcolm Smith, whose older brother Steve was a star receiver who played alongside Bush, the decision to relinquish the Heisman doesn't diminish what he accomplished as a player.
"The things he did on the field are – I've never seen anything in comparison to it. I feel the same regardless," Smith said.
As for what happens to the Heisman now, former Texas quarterback Vince Young said on Twitter, "Reg will continue to be the 2005 Award recipient and I will continue to be honored to have been in the 2005 Heisman campaign with such a talented athlete."
Texas coach Mack Brown and Young's former teammate Colt McCoy had advocated that Young, as runner-up, to Bush should receive the award.