Tor: What is a Tor exit relay?

Short answer

An exit relay is the last relay in a Tor circuit when you visit an ordinary internet site. It connects to the destination, so that site sees the exit relay's IP address. The exit operator does not automatically learn your original IP address from the circuit, but can observe traffic on the exit side if the destination connection lacks its own encryption.

Sources

Tor Project: Relay types, Tor Project: Secure connections.