Wigan defeated Sheffield United 2-1 on Sunday's final day of the Premier League season, keeping the club up on goal difference. Sheffield United joined Charlton and Watford as the relegated clubs.
The 42-year-old Jewell had been in charge of Wigan since June 2001 when the club was in the third tier of English soccer. He's since guided the club through two promotions, culminating in qualification to the Premier League for the 2005-06 season.
"I have made this decision with a heavy heart, but I feel it is time for me to have a break from football," Jewell said.
Wigan chairman Dave Whelan said Hutchings deserved a chance after six years as Jewell's assistant.
"He is one of the best and most knowledgeable coaches in the Premiership and knows the game of football inside and out," Whelan said. "I also feel it's important to have someone who understands this club, so that we have continuity and start planning straight away for next season."
Hutchings' only other managerial experience was a 21-game stint at Bradford in 2000.
Jewell was Wigan's longest-serving and most successful manager in the club's 75-year history.
"I have given everything I have as a person to bringing success here over the past six years, and it is not an easy think to walk away from somewhere and something which has been such a part of your life for so long," Jewell said.
"The intensity of football at the highest level, although completely addictive, is also very draining, and I feel I would be kidding the chairman, my players and the supporters if I was to carry on."
Last season, Wigan finished 10th and reached the League Cup final, losing to Manchester United.
Whelan said he accepted Jewell's resignation with great reluctance.
"I believe Paul was the right man to carry this club forward, but he has decided that he has taken the club as far as he can and leave it for someone else to take over," Whelan said. "His honesty has always been a defining aspect of his management, and this decision is exactly that."
Jewell also managed at Sheffield Wednesday and Bradford after finishing his playing career. Jewell spent two years as trainee striker with Liverpool, without making an appearance in the first team, before moving to Wigan where he played from 1984-88. He also played with Bradford and Grimsby.