News report by ITV News correspondent Martin Geissler
Barack Obama thanked Americans for making him "a better man" as he called on his fellow countrymen and women to believe in their ability to "bring about change".
In his farewell speech as US President, he admitted the country's progress had been "uneven", telling a rapturous crowd in Chicago that the work of democracy has "always been hard, contentious and sometimes bloody".
He lauded his achievements in reversing the recession, landing the right to health insurance for 20 million more people, securing marriage equality and killing the 9/11 mastermind Osama Bin Laden.
Mr Obama added that he is "even more optimistic" about the future of the United States than when he took office eight years ago, as he thanked his family and "remarkable staff".
Achievements as US President
Speaking about his major achievements in office, he said: "If I had told you eight years ago that America would reverse a great recession, reboot our auto industry, and unleash the longest stretch of job creation in our history…if I had told you that we would open up a new chapter with the Cuban people, shut down Iran’s nuclear weapons program without firing a shot, and take out the mastermind of 9/11…if I had told you that we would win marriage equality, and secure the right to health insurance for another 20 million of our fellow citizens – you might have said our sights were set a little too high.
"But that’s what we did. That’s what you did. You were the change."
However Mr Obama admitted "for all the real progress we’ve made, we know it’s not enough."
He said: "Our economy doesn’t work as well or grow as fast when a few prosper at the expense of a growing middle class.
"But stark inequality is also corrosive to our democratic principles. While the top one percent has amassed a bigger share of wealth and income, too many families, in inner cities and rural counties, have been left behind – the laid-off factory worker; the waitress and health care worker who struggle to pay the bills – convinced that the game is fixed against them, that their government only serves the interests of the powerful – a recipe for more cynicism and polarisation in our politics.
"There are no quick fixes to this long-term trend."
Transfer of power to Trump
Mr Obama said in 10 days the world would witness the peaceful transfer of power to a new president, drawing some jeers ahead of Donald Trump's presidency.
He said he pledged to Donald Trump that his administration would "ensure the smoothest possible transition" just as his predecessor George Bush did for him, and said the nation's politics needed to reflect "the decency" of the American people.
One of Mr Trump's key campaign pledges was to abolish so-called 'Obamacare', but the out-going President said he would "publicly support" any plan that is "demonstrably better" than the health reforms he put in place."
"Today, the economy is growing again; wages, incomes, home values, and retirement accounts are rising again; poverty is falling again," said Mr Obama.
"The unemployment rate is near a ten-year low. The uninsured rate has never, ever been lower. Health care costs are rising at the slowest rate in fifty years. And if anyone can put together a plan that is demonstrably better than the improvements we’ve made to our health care system – that covers as many people at less cost – I will publicly support it."
Mr Obama said his administration had "taken out tens of thousands of terrorists", and said it had been "the honour of my lifetime to be your Commander-in-Chief".
He promised supporters that Islamic State "will be destroyed", adding "no one who threatens America will ever be safe".
Wrapping up his final address to the American people, Mr Obama said: "I leave this stage tonight even more optimistic about this country than I was when we started.
"Because I know our work has not only helped so many Americans; it has inspired so many Americans – especially so many young people out there – to believe you can make a difference; to hitch your wagon to something bigger than yourselves.
"This generation coming up – unselfish, altruistic, creative, patriotic – I’ve seen you in every corner of the country.
"My fellow Americans, it has been the honour of my life to serve you. I won’t stop; in fact, I will be right there with you, as a citizen, for all my days that remain.
"For now, whether you’re young or young at heart, I do have one final ask of you as your President – the same thing I asked when you took a chance on me eight years ago.
"I am asking you to believe. Not in my ability to bring about change – but in yours.
"I am asking you to hold fast to that faith written into our founding documents; that idea whispered by slaves and abolitionists; that spirit sung by immigrants and homesteaders and those who marched for justice; that creed reaffirmed by those who planted flags from foreign battlefields to the surface of the moon; a creed at the core of every American whose story is not yet written: Yes We Can. Yes We Did. Yes We Can.
"Thank you. God bless you. And may God continue to bless the United States of America."