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A few examples:

4th Hokage: He was nominated and chosen when 3rd Hokage was still alive and was capable of fighting (courtesy: 9-tails attack on Konoha)

5th Hokage: after the Third Hokage deceased.

4th Raikage: After the Third Raikage deceased.

I thought the next Kage would only be chosen after the previous Kage's death. But that wasn't the case for 4th Hokage! Was he strong enough to be believed to take over Third? Was it because the Third believed he was too old ?

Btw, the Third continued to be Hokage after 4th was deceased!

I have never come across an info that notified the 4th Hokage's nomination..

JNat
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Rookie Programmer Aravind
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    Lets compare it with the pope :P. Normally, a new pope is nominated after the dead of the old pope. But suddenly, the last pope decided to retire, so they're searching a new pope now. It's just because he wants to. It's not the best comparison, but I think it works :D. – looper Mar 04 '13 at 11:47
  • @looper, LOL :D :D good one!! – Rookie Programmer Aravind Mar 04 '13 at 12:12
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    @looper With all due respect to Tartori, your comment explains it better. :) – Masked Man Mar 04 '13 at 15:21
  • A Hokage does not have to die for a new one to be chosen! Plus, you can probably retire when or before a new Hokage is chosen. – brianahj Nov 05 '13 at 00:23
  • All the kages but Gaara in the Fourth Shinobi War ended up retiring, if you remember from the epilogue — Tsunade, Kakashi, Onoki, Mei Terumi, and Ay. – Jeffery Tang Jul 19 '16 at 22:13

3 Answers3

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In the wiki stands the following:

After serving as Hokage for many years, Hiruzen started looking for a successor to the title. While he hoped to be able to give the position to Orochimaru, he saw that he only was interested for the power it offered. Though he turned to Jiraiya, Hiruzen instead named Jiraiya's student Minato Namikaze as his successor.

I found no information about why he wanted to retire, but it seems that he just wanted to retire. Additionally shortly before he died, he spoke about retirement too.

Note that the Second Hokage chose the third before he died according to this article:

He chose to sacrifice himself after he selected his prized student Hiruzen for the position of Third Hokage. Homura and Koharu would later become Hiruzen's advisers. After giving the title of Hokage to Hiruzen, Tobirama went off to fight the enemies where he died a noble death

Tartori
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The third Hokage, Hiruzen Sarutobi was the oldest Hokage and best the village had ever had seeing as he served in the position for the longest time and was did so very well. However, he knew that he would not be alive much longer to fulfill the position. He began a search for someone worthy of the title. He thought about Orochimaru, but later realized he only wished to have the title for the power it'd bring him. He thought of Jaraiya, but he did not want the position. Hiruzen then selected Minato Namikaze seeing how he was Jaraiya's student and ultimately the next best thing. Later, Orochimaru challenged the 3rd Hokage in a battle to the death. The two went all out which ended Hiruzen's life and reign as Hokage, but not before he used a reaper death seal to seal Orochimaru's arms, preventing him from using hand seals and ninjutsu and a life of pain for as long as he lived. Thus, Minato was the acting 4th Hokage, before this advent he merely held the title until Hiruzen's death transpired.

Phillip Thomas Johnson
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The answer is contained in the Kakashi: Shadow of the Anbu Black Ops arc in the anime. Given this question was asked in 2013, that probably explains why none of the answers have the correct answer, as it probably wasn't readily available at the time (I didn't actually check the dates when the episodes came out, I'm just guessing).

Towards the end of the Third Shinobi War, the Third Hokage negotiated for a peaceful resolution without reparations, and this was viewed as weakness by many. The Third Hokage was blamed for the losses of the war, and Hiruzen stepped down as Hokage to appease everyone who was annoyed with him and everyone who was angry with him. This is his way of accepting responsibility. Though if you believe Danzo and Orochimaru, Hiruzen Sarutobi intended to use Minato Namikaze to basically continue his reign, so stepping down was somewhat of an empty act to get everyone off his back.

From the Fandom wiki:

In Konoha, although the war had been proceeding favorably for the village, the Third Hokage established a policy of reconciliation to bring an end to the fighting with an unprecedented offer to not seek reparations from Iwa. Advocates for the war opposed Hiruzen's seemingly weak decision, and to keep dissatisfaction in the village in check, he decided to step down as Hokage.

Shaymin Gratitude
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