How to Quit Your Piano Lessons?

Mentally state the Reason. Why do you want to quit? Are you tied up with School? Are you financially in debt? Make sure that your reason is legitimate and that quitting is no other option. Saying "'Coz I don't like practicing" will make you sound like a fool and your teacher will be glad having you gone.
Rehearse your Speech. Make sure you know what you are going to say before you tell your teacher. Making it up as you go along will make you less articulate.
Tell your Teacher you're quitting. Bring this issue up at the beginning or end of your lesson. Stating that you are quitting right after you've finished playing "Moonlight Sonata" is a bad time to bring this up.

Add that this is temporary (unless you know for sure that it is not) and will return to him/her again at a later date or another teacher. Totally giving up is a waste of your time and talent.
If your teacher is a bad one, it is perfectly okay to quit. If you're 16 and have been playing for 3 years and has you practicing level 2 songs, you definitely need to quit.
If it's because of money problems, don't be afraid to state that it is. Otherwise, your teacher will think it was her/his fault!