The department for media, culture and sport is to appoint a new chair of Arts Council England when Sir Peter Bazalgette ends his term next year.
Bazalgette said he was “extremely proud” of the work ACE has done "making the case for investment in the arts".
He said: “Championing the arts and culture in this country at a time when public finances have been constrained has been a challenge, but one that I have enjoyed tremendously. And with another year to serve, there is still plenty to do.
“I have been extremely proud of the work we’ve done. The Arts Council is in a strong position to ensure our arts and culture continue to flourish. I meanwhile have a number of opportunities in the Creative Industries I’d like to take up before I pop my clogs.”
Bazalgette told The Guardian: "I will be 63 next January. I spend a lot of time on the Arts Council and that’s fine, I love it. But the question is: do I want to do it for eight years? I am very active in the creative industries and intend to continue to be active but I want to do a few other things.”
He added: “It is in a way with regret but on the other hand you get into your 60s and think, ‘God, what do I want to do?’”
Culture secretary, John Whittingdale, paid tribute to Bazalgette’s “successful leadership” and his contribution to the arts sector.
He said: "Sir Peter has done a fantastic job leading Arts Council England over the past three years and has brought real enthusiasm and expert knowledge.
"He has made an invaluable contribution to the arts in this country and I would like to thank him for the incredible work he has done championing the sector."
Bazalgette has chaired ACE since February 2013 and will remain in his role until his tenure ends on 31st January 2017. Bazalgette was former chair of English National Opera.
Recruitment for the new chair is expected to begin in the spring.
ACE's funding was protected in the recent government Spending Review, with the organisation given an increase of £10m a year in cash for the four years up to 2020.