His announcement comes as the regional newspaper publisher recorded its first underlying profit increase since 2004.
The company told PrintWeek that the increase was down to cut costs and improved performances in its digital division, although newspapers were still struggling.
Fry, who took over in January 2009, said he had taken the decision to step down for "personal reasons". His departure will happen no later than March 2012.
He said: "It will give me more time to spend on personal projects. The process of finding my replacement will begin today; it will be a straightforward process."
Johnston Press recorded a turnover of £398.1m for the year to 1 January 2011, down 6% on the £423.7m that it recorded in the previous year. Underlying operating profit was £72m, up 3.9% from £69.3m in 2009.
However, underlying pre-tax profit was down nearly 30% at £30.5m, and the company posted an adjusted pre-tax figure of £16.5m.
Like-for-like newspaper sale revenues were down 2.8% on the year, which the company considered to be above the industry average. Advertising revenue for print also continued to decline; not dropping as much, however, as was seen in 2009.
Fry told PrintWeek: "Back in 2004, we were predominantly a classified-led business. What we have today is far more diverse. We have a growing digital revenue, growing cover price revenue and contract print."
Speaking at a webcast this morning, the company's chief financial officer Stuart Patterson said that contract print income was down by £5.6m. This was partly down to the closure of its Kilkenny facility, coupled with contract losses.
He said: "With no further press closures planned for 2011 and contract wins already we expect to be stable going forward." Patterson later told PrintWeek that the print market itself remained uncertain because nobody was sure how local government cuts would affect the sector.
Patterson himself will also be stepping down from his role on 15 March 2011. He will be replaced by former Guardian Media Group and Channel 5 chief financial officer Grant Murray.
