Players and coaches were told about Carroll's decision via a text message from an assistant coach on Sunday. Carroll was set to meet with team members at Heritage Hall later Monday.
Seahawks CEO Tod Leiweke spent Sunday in Los Angeles meeting with Carroll. Two town cars were seen outside the 58-year-old's Manhattan Beach home on Sunday.
Only one other active coach in college football has a higher winning percentage than Carroll.
Carroll has a 97-19 record with USC, leading the team to seven Pacific 10 Conference titles and two national championships. During Carroll's nine seasons as head coach, the team was ranked in the top 25 for 104 consecutive games and USC became the only school to win three straight Rose Bowl games.
He also coached Heisman Trophy winners Carson Palmer in 2002, Matt Leinart in 2004 and Bush in 2005.
Starting Trojan linebacker Chris Galippo said even without Carroll as head coach, USC is set to have a good season.
"We have enough core guys returning. We have enough guys that, you know, are in big time leadership responsibilities," said Galippo. "Matt's going to have a year under his belt you know. I've got a year starting under my belt. We had a year really to make a lot of mistakes and learn a lot of lessons, and now I think it's our chance to kind of let it all go. Regardless who the coach is you know, the players still got to play and so I think we're going to be fine."
Meanwhile, fans are trying to come to grips with the change in command. Some SC students were caught off guard by Carroll's sudden departure.
"With Pete Carroll gone, I mean, he's the face of USC football. You know what I mean. And it's just kind of like when you're running a ship this large, you know, who's going to come in and be the captain next," said USC senior Alex Stewart. "As a Trojan football fan, we're never worried per se, but it's going to be interesting to see what happens. I'm still confident though."
Carroll's resignation comes one week after USC placed sanctions on its basketball program because of NCAA violations, and the school's football program is still the subject of an NCAA investigation.
There is no word yet as to who will replace Carroll. Some names that are being thrown around are Jaguars coach Jack del Rio or former Kansas City head coach Herm Edwards.
The Seahawks fired coach Jim Mora on Friday following just one season, even though he had three years and about $12 million remaining on his contract. General manager and president Tim Ruskell was forced to resign last month, leaving Seattle without a coach, general manager or president less than four years after the team reached the Super Bowl.
Carroll went 6-10 with the Jets in 1994 and 27-21 while twice reaching the playoffs from '97-99 with the Patriots - before he restored a dynasty at USC beginning in 2001.
Seattle is 9-23 since its run of four consecutive NFC West titles ended in the 2007 season.
The Associated Press contributed to this report.