Despite the surrenders, hundreds are said to be still inside
Maulana Abdul Aziz told state TV the siege was "massive" and it was time to give up. He was caught trying to leave the Red Mosque in a burqa on Wednesday.
Hundreds of students remain in the mosque. At least 1,000 have given themselves up.
The clerics have been campaigning for Islamic Sharia law in Islamabad.
Students have kidnapped police officers and people they accuse of involvement in "immoral" acts such as prostitution.
The BBC's Barbara Plett in Islamabad says the radicals do not have much support in the capital and people are quite glad to see the government taking them on.
But the authorities' action is likely to upset people in the more conservative North-West Frontier province, where most of the students come from.
At least 16 people have died in recent clashes at the complex.
In his comments to state television, Maulana Abdul Aziz said he realised the government had massive resources.
"After coming out I saw the siege was massive and came to the conclusion that we should give up," he said.
"I realised that people will not be able to stay inside for long... I have told them not to sacrifice their lives for me."
He said only a few of the hundreds still inside the mosque were armed.
Pakistani troops have been tightening their grip around the mosque in recent days.
They set off a series of eight explosions outside the mosque before dawn on Thursday. No casualties have been reported but there was some damage to the mosque.
"All people in the mosque should surrender or they will be responsible for losses," said the police warning broadcast over loudspeakers, according to witnesses quoted by Reuters news agency.
The government said more than 1,200 students had surrendered so far, and that their details were being recorded at a camp set up near the mosque.
Following the expiry of an 0900 local time (0500 GMT) deadline on Thursday, at least four more female students and one male student were seen giving themselves up.
The mosque leaders have warned of suicide bombings if security forces storm the complex.
But one student, Johar Ali, 20, said as he left that he had not seen any suicide bombers among those inside.
Others said many students were ready for "martyrdom".
The students holding out in the mosque are now led by Maulana Aziz's brother, Abdul Rashid Ghazi.
He said the radicals would not surrender unless troops pulled back.
Some children are thought to be in the mosque, but Mr Ghazi reportedly refused to allow their release despite requests from parents.
Our correspondent says the threat of force is likely to remain but that talks are expected to continue.
Pakistani President, Gen Pervez Musharraf, has long been criticised for failing to clamp down on the mosque's activities.
The latest confrontation reportedly started when security forces tried to place barriers around the mosque.
On Tuesday, women students of one of two seminaries attached to the mosque protested in the street, while their male counterparts traded gunfire with security forces.The violence took the stand-off to a new level, leaving the authorities little choice but to bring the situation to a conclusion, correspondents say.