He will be replaced by batsman Tom Latham, 32, for the upcoming series in India, New Zealand Cricket confirmed today.
Southee, 35, has been in charge since December 2022, his tenure ending after a comprehensive series loss in Sri Lanka last week.
He has captained the side in 14 Tests (six wins, six losses, two draws) since taking over from Kane Williamson.
In a statement today, Southee said the decision to step down was made in the best interests of the team.
“I’ve always tried to put the team first throughout my career and I believe this decision is the best for the team.
“I believe the way I can best serve the team moving forward is focusing on my performances on the field and getting back to my best, to continue taking wickets and helping New Zealand win Test matches," he said.
“I will, as I’ve always done, continue to support my teammates, especially the exciting young bowlers making their way on the international stage.
“I wish Tom all the best in the role and he knows I’ll be there to support him on his journey, as he has done for me over the years.”
In 102 test matches Southee has taken 382 wickets.
Black Caps coach Gary Stead acknowledged Southee’s contribution to the Test team.
“Tim’s a fantastic player and a very good leader who is held in high regard by the players and support staff,” he said.
“He’s been a great servant of New Zealand Cricket over nearly 17 years playing on the international stage, and I’d like to acknowledge his humility in stepping down from the role as Test captain.
“It’s not easy giving up something you love, but Tim is a true team-man and he’s made the decision with the team’s best interests at heart. He’s one of our greatest ever players and we still very much see him playing a part in our Test side moving forward.”
NZC chief executive Scott Weenink saluted Southee for his selflessness in putting the team first.
"It's a measure of the man that he continues to put the team interests ahead of his own and, despite his obvious personal disappointment, wants to do the best thing possible for everyone else.
"To me, that's the sign of a true leader in every sense of the word. Tim will continue to be an important leader within this group."
