The club will appoint a head coach to look after the first team, with Slade overseeing scouting among other duties.
He will be in charge for the final time when they host Birmingham as the Championship season ends on Saturday.
"The club feels that it is necessary to have a change. We want to create a spark to take us to another level," said chief executive Ken Choo.
Slade joined Cardiff in October 2014 from Leyton Orient and has said he wants to stay with the Bluebirds.
He held talks with chairman Mehmet Dalman following the defeat at Sheffield Wednesday which ended their play-off hopes.
Slade has insisted he has made ''progress'' at Cardiff this season with the Bluebirds destined to finish either seventh or eighth, having been placed 11th at the end of the 2014-15 season.
He succeeded Ole Gunnar Solskjaer who was in charge when Cardiff were relegated from their only season in the Premier League, 2013-14.
Cardiff had targeted a place in the play-offs, and fell short as they recorded one win in their previous six matches.
Choo's comments hint that the club feel Slade has taken the team as far as he can.
"We feel it is necessary to have a vacancy in that position," he said.
"And then have some body take it to another level.
"This season we have improved significantly. We want to build on it so we are trying to create a leaner and meaner team for next season."
"It's going to be different, that's for sure and I've done an awful lot of games as a manager and now that has come to an end," said Slade.
"But I will look forward and focus and look to see what I can do help in the process of moving the club forward.
"I'm looking forward to the Birmingham game and it really would be nice to go out on a high and get three points to finish the season."
BBC Wales football correspondent Rob Phillips says: "The bookies have already installed Craig Bellamy as favourite to take over from Slade, but that is highly unlikely to happen.
"Cardiff are looking for an experienced candidate who they believe will build on the stability Slade installed.
"Any new recruit would also obviously have to be happy to work with a head of football, which might be off-putting for some."
Russell Slade is to be removed from his role as Cardiff City manager and will take up a new role as head of football.