Charlton was one of the United directors who appointed Ferguson in 1987.
The Red Devils boss has since gone on to win 13 Barclays Premier League titles – a feat that Charlton was quick to praise today.
"He is such a fantastic manager. Everything he has done has been fantastic," said Charlton at the launch for the Royal Mail’s Football Heroes Special Stamps.
"He is a sensational person in every form and I am really delighted for him.
"I am a director but I hardly do anything because we are winning all the time and it is all down to Sir Alex Ferguson.
"He would get up in the middle of the night and travel 300 miles if he thought there was a school boy that he could sign.
"He loves the game and we at the club have had nothing to do really."
The former United striker thinks there were several reasons behind the 71-year-old’s decision to call time on his career.
"He has made his decision on various grounds like (because of) his family and because of the hip operation he will have this summer."
Manchester United chief executive David Gill has hailed working with Ferguson as the "greatest experience" of his working life.
Gill said: "I’ve had the tremendous pleasure of working very closely with Alex for 16 unforgettable years – through the treble, the double, countless trophy wins and numerous signings.
"We knew that his retirement would come one day and we both have been planning for it by ensuring the quality of the squad and club structures are in first-class condition.
"Alex’s vision, energy and ability have built teams – both on and off the pitch – that his successor can count on as among the best and most loyal in world sport.
"The way he cares for this club, his staff and for the football family in general is something that I admire. It is a side to him that is often hidden from public view but it is something that I have been privileged to witness in the last 16 years.
"What he has done for this club and for the game in general will never be forgotten. It has been the greatest experience of my working life being alongside Alex and a great honour to be able to call him a friend."
Fellow United old boy Bryan Robson was another surprised by the decision of the man he will always call ‘the boss’.
"It definitely came as a surprise because I go in to watch training every now and again," the former midfielder said.
"The boss hadn’t mentioned anything, not that he would because he does not give too much away. Still, it is a bit of a surprise.
"It would have to happen at some stage and I think the boss must have just felt he has got a lot of grandkids and maybe he wanted to spend a bit more with them."
Robson, who retains close ties with United as a global ambassador, thinks Ferguson will get a say in who replaces him.
"The favourites are up there," Robson added.
"Mourinho gets mentioned all the time and David Moyes has been mentioned for quite a time.
"I think the boss gets on really well with both of them and I am sure the boss will have had a say in where the club do go next.
"The one thing I always believe with Manchester United, and that is why I am pleased to be involved with them, is that they do get a lot of decisions right and I am sure that they will get this one right."
Former Liverpool and England striker Michael Owen, who played under Ferguson at United, was surprised at the timing of his decision to retire.
Owen told Channel 4 Racing: "I’m surprised, but everyone’s got to retire at some stage.
"I thought he was going to go on for another year or two.
"Anyone in their early 30s and below would have know nothing else other than Sir Alex leading Manchester United out.
"It’s an unbelievable piece of news. It’s inevitable in many ways, but I didn’t see it happening this year.
"He’s a phenomenal manager and I’m so proud I can say I played under him for a couple of years."
Joel Glazer, joint chairman of the Manchester United board with brother Avie, pinpointed the 2008 Champions League final penalty shootout success over Chelsea as a highlight among the many memories.
He said: "Alex has proven time and time again what a fantastic manager he is but he’s also a wonderful person.
"His determination to succeed and dedication to the club have been truly remarkable. I will always cherish the wonderful memories he has given us, like that magical night in Moscow."
Ferguson will take on the roles of both director and ambassador for the club after stepping aside from the managerial hotseat.
Avie Glazer said: "I am delighted to announce that Alex has agreed to stay with the club as a director.
"His contributions to Manchester United over the last 26 years have been extraordinary and, like all United fans, I want him to be a part of its future."
First-team coach Rene Meulensteen was told of Ferguson’s plans on Wednesday morning and felt the news was not entirely unexpected.
"(I found out) this morning when I came to the club," he said on Sky Sports News. "He called us into his office and he said what decision he took.
"It’s always been on the cards – there’s speculation every season. I think the manager kept his cards close to his chest. I think he felt the time was right now and he made a decision.
"He’s obviously a man who thinks very, very well so I’m sure he’s taken a lot of thought into making this decision.
"I wish him well. He’s been fantastic for this club and I hope all the fans give whoever’s going to come in the same support that he gets."
The Dutchman added: "We’ve responded really well to the big disappointment we had last year. There was a determination around the whole place – especially around the manager – and I think he’s been delighted we won the title the way we did."
Asked who should replace Ferguson, Meulensteen joked: "(Club mascot) Fred the Red!"
Former player Paul Ince described Ferguson as one of a kind and also admitted finding a replacement would not be easy.
Blackpool manager Ince told Sky Sports News: "He’s done the lot, you will never see anyone of his kind again."
When Ince joined United from West Ham in 1989 Ferguson made sure his move was not ended because of a problem with his medical.
"I remember the first day that I joined Man Utd. I failed my medical and I thought my move to Man Utd was going to collapse. The way he treated me was like a son and I will never forget that moment.
"To play under that man was so demanding, his standards were so high. We had our ups and downs, a lot have ups and downs with him."
Ince said Ferguson’s replacement would have a difficult act to follow.
"It’s got to be someone with a massive character. It has got to be someone who can deal with what it takes to be a Manchester United manager.
"Whoever comes in to replace him is going to have to deal with the Man United legacy."
Ince believes Ferguson staying at the club as a director could be a double edged sword for his successor.
"It can have its advantages and disadvantages. Replacing Alex Ferguson is such a massive, massive job. Whoever goes in will need the help of Alex Ferguson," he said.
"Whoever comes in if it doesn’t go well you’ve got Sir Alex Ferguson upstairs and it can put added pressure on you."
Professional Footballers’ Association (PFA) chief executive Gordon Taylor said Ferguson would be "the toughest act to follow".
Taylor said: "The game of football will be a lot poorer place without him. He has been quite simply the best. He followed in Sir Matt Busby’s footsteps and even surpassed him.
"He will be also be the toughest act to follow."
Taylor has been PFA chief throughout Ferguson’s time at United and he admitted they had clashed on occasion – but that it was soon forgotten.
He added: "I will miss him – he has been a very good friend of the PFA throughout his career.
"Of course at times it has not always been smooth and we have had a difference of opinion but we always respected each other and we have had a lot more agreements than disagreements.
"He is a great football man, he has turned out team after team and in terms of youth development he has been one of the finest exponents of that. He has had a faith and a belief in his youngsters that is rare in today’s football."
Former United striker Dwight Yorke, who played under Ferguson between 1998 and 2002 and was part of the 1999 treble-winning side, feels a combination of factors led the Scot to call it a day at the age of 71.
"I’ve seen Sir Alex Ferguson on Monday at a charity game," the former Trinidad and Tobago international told Sky Sports News.
"He was in good spirits but the rumours were really strong around the place that he was going to retire and there was a big announcement supposed to be happening tomorrow and not today.
"I think probably the fact of the club floating on the stock market meant this decision needed to come out very quickly. But the people within the football club knew this was likely to happen this season. And I think with his hip replacement (booked in for late July), with David Gill going as well, that sort of pushed him to say ‘this might be the best time for me to retire’."
Yorke expects there to be a strange atmosphere in the immediate wake of Ferguson’s departure from the helm.
"He’s been such a focal point at the football club," he said. "He’s taken Manchester United to the level they are at right now.
"It’s a shock to the system because he’s been there every day. He’s the one person when you go into the football club he’s always there. For him not to be there from the start of next season, it’s not going to be right around the football club and it will take some getting used to."
Ferguson, of course, will be bowing out on a high having regained the Premier League title after being pipped to the crown by rivals Manchester City in dramatic circumstances on the final day of last term.
"He has very, very high standards and it’s all about winning trophies and breaking records with Sir Alex Ferguson," Yorke continued.
"But there’s more to the man. How they lost the Premier League last season – that would have hurt him immensely. Certainly losing it to Manchester City, that would have hurt worse than anything else.
"He wanted to regain it and he’s managed to do that in a great way and with a great style of play."
FIFA president Sepp Blatter, who gave Ferguson with a lifetime achievement award last year, said on Twitter: "Just heard Sir Alex Ferguson is retiring at end of season. His achievements in the game place him without doubt as one of the ‘greats’."
Cristiano Ronaldo reacted to the news by tweeting a picture of himself and Ferguson on the day he joined Manchester United, adding: "Thanks for everything, Boss".
UEFA president Michel Platini hailed Ferguson as "a true visionary". Platini said: "Sir Alex has made a massive contribution to football, not only in Scotland and in England, but across Europe and beyond.
"His dedication, his attention to detail and his unique eye for talent, as both the manager of Manchester United FC and Aberdeen FC, has brought rich rewards over a 30-year period.
"His CV is almost unique in a results-based profession that normally focuses on short-term solutions rather than long-term vision.
"He is a true visionary and I hope that, having helped us in the past through various coaching initiatives, he will continue to collaborate with UEFA to share his fantastic knowledge with the next generation of up-and-coming European coaches who all wish to emulate his achievements in the sport."