"I commend the people of Egypt for the peaceful and courageous and orderly manner in which they have exercised their legitimate rights," Ban said in a statement.
"I respect what must have been a difficult decision, taken in the wider interests of the Egyptian people," he added.
Mubarak, who ruled Egypt with an iron hand for over three decades, stepped down as President today and handed over power to the army capitulating under mass protests sweeping the country's streets for the last 18 days.
Mubarak handed over power to the military, announced the recently appointed vice president Omar Suleiman on state television.
Tahrir Square, the epicenter of the anti-government protests, erupted in joy with tens of thousands of people shouting ''Egypt is Free" India has also welcomed Mubarak's decision to step down.
The UN chief stressed the need for a "transparent, orderly and peaceful transition."
The transition, he said, should meet the "legitimate aspirations of the Egyptian people and includes free, fair and credible elections leading to the early establishment of civilian rule."
"I urge the interim authorities to chart a clear path forward with the participation of all stakeholders," he added.
Going forward, Ban said that human rights needed to be respected and everyone should have a say in the future course of the nation.
"The voice of the Egyptian people, particularly the youth, has been heard, and it is for them to determine the future of their country," he said.