New Zealand born Schmidt said he's committed to having at least 12 months off to spend more time with his family, in particular, his 15-year-old son, Luke who suffers from epilepsy and battled a brain tumour when he was younger.
Schmidt's decision means the All Blacks will have to look elsewhere for a new head coach to replace Steven Hansen, who announced last month he'll stand down at the end of the World Cup.
"That is certainly the short-term plan, to not be involved in coaching," Schmidt told The Independent at the launch of the 2019 Six Nations in London on Thursday (NZ time).
"Certainly not for 12 months and I'd say quite likely longer than that. We have a couple of family-related projects that we want to work our way through. I don't spend a lot of time at home already, so it's probably high time I did."
The 53-year-old took over the Irish in 2013, and has led them to plenty of success on the field and lifted them to second in the world rankings.
During his time, Schmidt has led Ireland to three Six Nations titles, including last year's Grand Slam victory, along with two wins over the All Blacks in 2016, and 18.
Schmidt also downplayed suggestions that he'd return to coaching in 2021 to lead the British and Irish Lions on their tour of South Africa.
"I wouldn't be available if asked [to coach the Lions] at the moment. I said to my wife that we'd get these 12 months done, and she said she thought I'd last 12 days potentially without needing to do something.
"I wouldn't say that I'm looking to do any coaching, so it's not at the front of my mind. One of the things I decided in a conversation with myself is that whatever does happen after that, I want to make sure these next 10 months are as good as I can help the players be, and to put as much effort into that. That's where your energies go."
Wales coach Warren Gatland has held informal talks with Lions' bosses over a third stint coaching the famed touring side for their trip to Africa.