He has served on the company's board for 51 years.
Johnston is the patriarch of the family that founded the newspaper group in 1767.
The retirement of the 75-year old Johnston will leave the press without any family representative on the board for the first time in 243 years.
Johnston's son Michael is a divisional managing director in Scotland.
Johnston Press, which publishes local newspapers and websites in the UK, has been trying to reduce the £424m debt it amassed in a buying spree. But the company scrapped plans for a second rights issue.