The former England captain, 40, will depart Emerald Headingley at the end of the season and is expected to switch codes again to take up a coaching role with Guinness Premiership club Leicester Tigers.
The iconic Sinfield, who led Rhinos to seven Grand Final wins, two Challenge Cups and three World Club Challenges as their inspirational captain, returned to the club in July 2018 in the newly-created position of director of rugby.
He helped turn the West Yorkshire club around following a difficult period and, though they are currently struggling for form, some of the changes he made, enabled them to push on and win the Challenge Cup again last season.
“This has been one of the hardest decisions of my career,” said Sinfield, who briefly played rugby union for Yorkshire Carnegie after retiring as a league player following Rhinos’ historic 2015 treble.
“It has been a privilege to return to the club and help take us forward into the future.
“When I returned, I always said I’d review my role after three years and that my reason for coming back was to help the club.
“The last 18 months have been a huge challenge and the role has changed significantly from the job I first came to do.
“My position is now further away from performance than I ever thought it would be.
“I love the club and the people I work with but I feel now is the right time for a new challenge.
“As well as the role changing, I have changed through my experiences in the last 18 months both at the club and through my fundraising activities.”
Sinfield was awarded an OBE on Saturday for his services to charity fundraising and to rugby league, after he memorably raised more than £2m for the battle against motor neurone disease by remarkably running seven marathons in seven days in aid of former team-mate Rob Burrow last winter.
He had already received an MBE in 2014. Since retiring, Sinfield had also worked as the RFL’s rugby director and was head of the England Performance Unit before stepping down in February last year following Wayne Bennett’s departure as national head coach.
However, he will now look to utilise his skills in the 15-man code.
Leeds chief executive Gary Hetherington said: “Like all Rhinos fans, I am extremely disappointed with Kevin’s decision.
“We always hoped he would enjoy a long career with us. I agree the director of rugby role has changed and we did discuss other roles at the club but it is not to be.
“I do understand and appreciate Kevin’s reasons for leaving for a new and different challenge.
“On behalf of everyone at the club, I would like to thank Kevin for the fantastic job he has done over the last three years in particular the unprecedented challenges over the last 18 months.
“Undoubtedly, when he leaves the club, he will leave it in a much better position than when he returned.”