Former assistant coach Russel Domingo has been appointed as the new Proteas' coach.
Domingo will take over at the helm of the national T20 side for the home series against New Zealand and Pakistan this season.
Cricket South Africa said on Friday that Kirsten would remain involved in team selection and the rolling out of playing strategies, and would continue to work closely with Domingo, but he would effectively take a back-seat role in the short format.
"I'm extremely honoured and excited about coaching the T20 squad," Domingo said. "Coaching at the highest level has always been a goal of mine and I'm looking forward to building on the foundation we have set for this format."
"I have enjoyed working with Gary since he took charge, and I am determined to ensure that we continually improve in this format and continue to cultivate a successful team culture and environment."
Kirsten said it would give him the opportunity to focus on Test and one-day series against the touring nations, and would also give him time to spend with his family.
"I believe this decision is a positive move to creating a more sustainable and balanced coaching approach," Kirsten said. "It's common best practice around the world, and we feel it will give us the platform to spread our coaching resources efficiently."
"I have worked closely with Russell over the past 18 months and I'm confident he will do a great job."
"He fully understands the Proteas culture and will be able to build that culture with the new crop of T20 players we will be blooding this season." – Sapa