"Every good fighter knows when to hang up the gloves. And for me, that time is soon approaching," Hatch said. "That's why after much prayer and discussion with family and friends, I've decided to retire at the end of this term."
His decision triggers an open contest in heavily Republican Utah — but it also establishes Romney, a frequent Trump critic, as an instant front-runner. And it sets the stage for Romney to play a very different role in the Senate than Hatch has, potentially complicating the president's already rocky relationship with the GOP on Capitol Hill.
Romney, 70, has not made any definitive public statements about his plans.
"I join the people of Utah in thanking my friend, Senator Orrin G. Hatch for his more than forty years of service to our great state and nation," he said Tuesday in a written statement on Facebook that did not address his future.
However, Republicans with a close eye on the race said they have seen signs for a while that Romney's allies have been gearing up for a campaign.
"I think the field is pre-cleared. I think he still wants to serve," Dan Eberhart, a wealthy GOP donor, wrote of Romney in an email. "I think we could use someone with his real world business experience in the Senate."
In fact, by the time Hatch made his announcement Tuesday, talk was already underway in GOP circles about who would staff a Romney campaign and when he might officially jump in. For instance, Matt Waldrip, a longtime Romney adviser, is widely expected to be his campaign manager, according to two Republicans close to the emerging campaign, who spoke anonymously to describe private plans. Waldrip did not immediately respond to a request for comment.
Romney enjoys deep family roots and strong institutional backing in Utah, as well as a powerful national donor network that he could quickly activate.
The former Massachusetts governor has shown a willingness this year to cross Trump on divisive matters. Late in 2017, just hours after Trump had voiced support for Roy Moore, the GOP's embattled Senate nominee in Alabama, Romney spoke out on Twitter against Moore. Weeks before that, Romney praised Sen. John McCain (R-Ariz.) following a speech that featured a sharp critique of Trump's approach to foreign policy.
Jason Chaffetz, a former Republican congressman from Utah and a Romney ally, said he sees potential for Romney and Trump to work together, noting that the president considered Romney for secretary of state during his presidential transition. But there will be a clear limit to what Romney would tolerate without speaking out, Chaffetz said.
"Make no mistake about it: Mitt Romney is going to speak his mind if he thinks the president is saying or doing something silly," Chaffetz said. "He's going to express it."
In early October, Hatch said he had spoken with Romney about the Senate race.
"I like Mitt," Hatch said at the time. Asked if he thought Romney would be interested in coming to Washington during the Trump era, Hatch replied, "I don't know. It didn't seem like it to me," adding a chuckle at the end.
The White House, meanwhile, offered no assurances that Trump would campaign for the eventual Republican nominee in Utah. "I don't think we've made a determination in terms of campaigning," said press secretary Sarah Huckabee Sanders.
As chairman of the Senate Finance Committee, Hatch was a leading public face of Republican tax legislation that Trump signed into law late last month.
Sanders said Trump "has the greatest and deepest amount of respect for Senator Hatch and appreciated the role he played in the tax talks."
In his announcement, Hatch mentioned Trump, who urged him to run for reelection in December.
"When the president visited Utah last month, he said I was a fighter. I've always been a fighter," Hatch said.
For months, Hatch's political future has been on the minds of Republican strategists and officials, many of whom expected him to step down at some at some point soon after the tax bill was completed.
Hatch was first elected to the Senate in 1976. He is finishing his seventh term in the upper chamber of Congress this year as the longest-serving Republican senator in history.
His departure will leave openings in important and symbolic roles. If Republicans hold their majority in this year's elections, Sen. Charles E. Grassley (R-Iowa) would probably reclaim his seniority on the Finance Committee and give up the gavel at the Judiciary Committee.
Hatch will also give up the title of president pro tempore, the constitutional leader of the Senate who is in the presidential line of succession behind the vice president and House speaker. If Republicans hold the majority, Sens. Thad Cochran (R-Miss.) and then Grassley are next in line to claim that largely honorary role.
Normally mild-mannered, Hatch has flashed a more fiery side at times during his Senate career. He got in a heated debate in November with Sen. Sherrod Brown (D-Ohio) over the tax bill, raising his voice as he objected to Brown's argument that the legislation was tilted in favor of wealthy Americans.
"I come from the lower middle class, originally," Hatch snapped at Brown at a Finance Committee hearing. "We didn't have anything. So don't spew that stuff on me. I get a little tired of that crap."
Hatch was one of the authors of the original Children's Health Insurance Program legislation in 1997, working with Sen. Edward M. Kennedy (D-Mass.), who died in 2009. The program is back in the national spotlight, as lawmakers in both parties push for a reauthorization of the initiative, which expired last fall.
In his announcement video, Hatch touted his legislative résumé and record on confirming Supreme Court nominees.
"I've authored more bills that have become law than any member of the Congress alive today," he said.
Although Romney is widely expected to hold a deep advantage in both the nominating contest and the general election, the rules governing the nominating process in Utah are complex and have produced surprises — and the Republican electorate is deeply conservative.
In 2010, the late senator Bob Bennett lost the nomination to Mike Lee after Lee built support at caucus meetings across Utah that stacked support in his favor at the state GOP convention and blocked Bennett from the primary ballot. Since then, the party has changed the nominating rules to allow a candidate to bypass the caucus and convention process by obtaining a minimum number of signatures.
"The Utah Republican Party is quite conservative," said Phill Wright, a member of the state Republican central committee and a former party vice chairman. "It would be hard for someone like Mitt Romney to win at the convention with delegates."
But there is "no question," Wright added, that Romney has the organization and resources to collect the necessary signatures to succeed.
One other Republican candidate, attorney Larry Meyers of St. George, Utah, has announced plans to run for the seat. Meyers tried to unseat Rep. Chris Stewart (R) in 2014, but he was defeated at the state party convention.
Other Utah conservatives in the state have been trying to recruit another conservative to contest Romney from the right, but no candidates have come forward.
"Conservatives are always looking someone with the moral quality Romney has and is conservative at the same time," said Gayle Ruzicka, the president of the Utah Eagle Forum. "He's not conservative."
Among those cheering on Romney to run Tuesday was Evan McMullin, a Utah native who ran for president as an independent in 2016 and who has talked about running for office again some day.
"In this seat, we must have a leader prepared to meet the challenges of our day and our future. I hope that leader will be @MittRomney," McMullin wrote on Twitter.
Jenny Wilson, a Salt Lake City city councilwoman seeking the Democratic nomination for Hatch's seat, said in a statement that Hatch made "the right decision for Utah" and that she would stay in the race.
Paul Kane, Ashley Parker, Philip Rucker and David Weigel contributed to this report.