He is to be replaced by Leon MacDonald for a three-year stint. Umaga will stay on and take up a two-year contract as defensive coach.
Umaga's contract was extended in May to 2019, but the changes have been put in place after an end-of-season review with the Blues and NZ Rugby Boards.
Umaga said his passion lies with being the defence coach.
"I believe that is where I can make the greatest contribution and difference at the Blues," he said in a statement.
