O'Brien revealed the news in a press release Wednesday.
"I have been meeting with all the players this week with my evaluation of where they are at related to football and academics and to discuss what they need to work on this summer," O'Brien said. "After meeting with Steven, he informed me he wants to play elsewhere. We want what is best for Steven. I want to thank him for his contributions to the program. We wish Steven the best in the future and will assist him anyway we can."
A Georgia native, Bench will remain at PSU through the end of the spring semester (May 3).
On Twitter, Bench said the following: "I've decided to leave Penn State and go to a school that will give me the opportunity to compete for the QB spot and reach my full potential."
The second-teamer behind Matt McGloin as a true freshman last season, Bench spent the spring battling junior college transfer Tyler Ferguson for the starting job. After Saturday's Blue-White Game to wrap the spring, O'Brien said the duo were "neck-and-neck."
Entering the mix for the starting job this summer is FOX Sports NEXT five-star QB Christian Hackenberg.
Bench played in only two games last season (at Virginia and at Purdue). He was 2 of 7 for 18 yards.
Due to NCAA sanctions against Penn State, Bench will be eligible to play immediately if he transfers to another FBS school.