at the end of the seventh season.
Why is this confusing? Because my understanding is that the series was going to end at the end of, yes, you guessed it: the seventh season.
So... either this news is a non-event, or the producers were pushing to extend the show beyond seven seasons and that's the reason for the announcement. Since Lex is antagonist numero uno on the show I would say that this puts a lock on the show ending at the close of season seven. If they try to continue the show without the Lex character that will really just kill it, since the primary premise of the show is how Lex and Clark went from being friends to bitter enemies.
Hopefully the staff of Smallville will see the value of ending the show while it's still hot instead of pushing it past it's peak so that by the time it ends it's firmly ensconced in "jump the shark" territory.