Yzerman, 53, has been the GM of Tampa Bay since 2010. He will become senior adviser to new general manager Julien BriseBois, who had been serving as an assistant GM.
Yzerman said he came to the decision in late July not to sign another contract as GM and that it took until now to iron out details on what to do next. Yzerman's family has remained in Detroit, and he commuted during his time on the job.
"I feel this change in role is important for me to allow me to spend more time with my family and to still make sure the Lightning is managed to the level everyone has come to expect," Yzerman said. "We are all delighted that Julien is our next GM. He is more than ready.
"To do the job the way it needs to be done and to be with my family as well, it's becoming difficult to do. Hence the decision. I will be wherever I'm needed to be for Julien moving forward."
Yzerman said he was "100 percent committed" to the Lightning this season.
A Hall of Fame player and longtime captain of the Detroit Red Wings, Yzerman helped Detroit win three Stanley Cups between 1997 and 2002.
Yzerman had signed a four-year extension with Tampa Bay on April 7, 2014, which ran through the 2018-19 season. The Lightning made it to the Stanley Cup Final in 2015, but since then have had trouble getting over the hump. Last season's team finished with 113 points and a first place finish in the Atlantic Division, but was ousted in the Eastern Conference finals by the Washington Capitals.
The 2018-19 Lightning carry high expectations; they are believed to be one of the preseason favorites in the Eastern Conference and once again a legitimate Stanley Cup contender.
Prior to joining the Lightning, Yzerman spent four seasons as vice president with the Red Wings. He has also held management roles with Hockey Canada.
The 41-year-old BriseBois was hired as assistant GM by Yzerman in 2010. Before that, he was the Canadiens' vice president of hockey operations.
"Jeff is a great owner and I am excited to lead his hockey team and fulfill his vision," BriseBois said. "Steve has been a terrific general manager and a great mentor to me -- I look forward to our continued work together, only with different titles next to our names.
"The mission is going to be the same. That mission is to win the Stanley Cup. I can assure you everything will be done and nothing will be neglected in our pursuit to win the Cup."
Information from The Associated Press was used in this report.