Blues coach Sir John Kirwan has resigned, while former All Blacks skipper Tana Umaga is tipped to take over as coach on a three-year deal.
"The best thing for the club is for me to resign," Kirwan said at a press conference this morning.
Game results were cited as the reason for his departure and Kirwan said: "I spent 12 years preparing to come back and coach the team I love."
He said he wasn't interested in another role with the Blues and wanted to take a break and spend time with his family.
Sir John Kirwan's reign as Blues coach has been dismal, with the team registering a losing record in all three seasons.
This year the Blues had the worst season in franchise history, winning just three games and losing 13.
The team has not won the Super Rugby title since 2003 and has not made the playoffs since 2011, when they lost to eventual champions the Queensland Reds in the semi-finals.
JK "best thing for club is for me to resign"— Abby Scott (@abbyscotttvnz) June 18, 2015
Six weeks ago Kirwan proposed to the Blues board for his continued involvement, but said today if he didn't produce results the club wanted he would step aside.
"I had a chance to take a breath and reflect about the situation, my future and above all my love of this Blues club and the players,” he said.
"People who know me well know that I do not walk away from a challenge and that was what was driving me because I know what has been set-up in terms of organisational structure in the last two years."
Blues CEO Michael Redman said that the organisation owes much to Kirwan who will leave a legacy at the club, which became a standalone organisation last year.
"When JK arrived three years ago he had the courage to shine a spotlight on the areas within the organisation that were in serious need of an overhaul," Redman said.
"The playing record of the Blues under JK has not reflected his work and the determination he had to create a pathway for sustainable success going forward, based on strong values. That reform is now unstoppable and JK has to take a significant amount of the credit for it."
New Zealand Rugby Chief Executive Steve Tew said he supported Kirwan's decision to step down.
"John has given his all for the Blues. He has worked very hard to try and turn the team's fortunes around in what is one of the toughest rugby competitions in the world and we appreciate the contribution he has made," he said.
"Unfortunately the results have not been as we all would have wanted and he has made the call to step aside to allow for a fresh start for the team in 2016. We support that decision, thank JK sincerely and wish him all the best for the future."
Kirwan, who played 63 games for the All Blacks, previously coached the national teams of Italy and Japan.
The Blues said they would not comment on speculation about the team's next head coach, despite reports Umaga is set to join the Auckland-based franchise.
"I think Tana is an outstanding young man, I think he is one of the candidates … he would be fantastic."
The Blues board will meet next week to consider coaching options.
Umaga's coaching career began in France for Toulon during the 2008/09 season. He successfully saved the club from relegation before joining Counties Manukau as player-coach for the 2010 ITM Cup campaign.
He first tasted success when he secured the Steelers promotion to the ITM Cup Premiership in 2012, however, his greatest success as coach came in 2013 when he won the Ranfurly Shield for the first time in the province's history, successfully defending the Shield six times.
His overall coaching record for Counties is 27 wins, one draw and 25 losses.
JK "i spent 12 years preparing to come back and coach the team i love.."— Abby Scott (@abbyscotttvnz) June 18, 2015