In a surprise announcement, Cricket South Africa said on Friday that Kirsten opted not to stay longer than the initial two-year deal he agreed to in August 2011.
Kirsten cited "family reasons" for the decision. He had been required to state his intentions with regard to his future before April 30, the national body said.
"I have every confidence that the Proteas will continue to go from strength to strength," Kirsten said.
CSA said it was disappointed and its board accepted Kirsten's decision with regret.
Kirsten, the former South Africa opening batsman and World Cup-winning coach with India, has a young family and has often taken time out from his cricket duties with the Proteas to be with his wife and children. He coached India to the World Cup title in 2011 before returning to his homeland, and said then the desire to spend more time with his family was behind his decision to leave India.
"I would like to thank Cricket South Africa for the confidence they showed in entrusting me with the fortunes of the national team," he said. "It has been a huge privilege to represent my country as player and coach and to have been given the responsibility of growing the team.
"I would particularly like to thank Cricket South Africa for allowing me the flexibility to combine my coaching job with my family life during my tenure."
The national body would have desperately wanted Kirsten to stay beyond his initial contract after he led the Proteas to the top of the test rankings with a series victory in England last year and followed that up by winning in Australia and then whitewashing Pakistan at home.
Kirsten's unexpected decision also gives South Africa little time to appoint a successor before away series against Sri Lanka in July and August and Pakistan in November. The Proteas then host Australia and India at the end of this year and beginning of 2014.
Kirsten's last mission will likely be the Champions Trophy in England and Wales next month, when South Africa will search for a long-awaited one-day title to end a long run of failures in limited-overs tournaments.
"It is important that we move quickly to identify his successor," CSA president Chris Nenzani said, paying tribute to the "standard of excellence" brought to South Africa's team by Kirsten.
Nenzani said CSA would like to keep Kirsten involved with the national team in some way as "his experience as player, coach and mentor is not something we want to lose in its entirety."
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