The widely respected Smith said he would step down at the end of the Rugby Championship in September.
The widely respected Smith, part of the brains trust that helped guide New Zealand to back-to-back World Cups, said he would step down at the end of the Rugby Championship in September.
The 60-year-old said he had been involved in the All Blacks' coaching set-up for 20 years and he wanted to spend more time with his family.
"It's been a real privilege but there's been a lot of time away from home over the years," he told reporters.
"There are a lot of pressures and there is a lot of scrutiny."
Smith said he felt he was leaving the All Blacks in a strong position, with a number of promising coaches coming through the Super Rugby ranks who could replace him.
New Zealand Rugby chief Steve Tew called Smith "one of the great thinkers in the game", while All Blacks coach Steve Hansen said "he has left an ever-lasting legacy".
"Smithy is undoubtedly a true All Black legend," Hansen said.
Smith played 17 Tests for the All Blacks at fly-half before moving into coaching.
He steered the Canterbury Crusaders to successive Super Rugby titles in 1998 and 1999 and briefly served as All Blacks' head coach in 2000-01 before deciding he preferred the assistant's role.
He was part of the All Blacks' 2011 and 2015 World Cup triumphs and also worked as Waikato Chiefs assistant coach when they won Super Rugby titles in 2012 and 2013.
Tew said no one had been earmarked to replace Smith and the position would be advertised.
The successful candidate will join Smith and the rest of the All Blacks staff for the start of the Rugby Championship in August.