Hill's decision to step down from the Elite Panel of Umpires comes after he was used only as a third umpire during the recent Ashes series.
The 62-year-old was criticised for some of his decision-making during England's 3-0 Ashes success in the summer, with reports afterwards suggesting he was considering retirement.
Hill stood in 40 Tests, 96 one-day internationals and 17 Twenty20s and has been an elite umpire for the past 11 years.
Commenting on his decision, Hill said in a press release from the International Cricket Council: "I have treasured my time as an umpire and more recently as an elite umpire.
"It has been so special officiating internationally among great players alongside the finest umpires in the world. What a privilege.
"This wonderful opportunity as NZC Umpire Coach enables me to continue to be part of this marvellous match official community and work with the aspiring umpires throughout New Zealand. What a challenge and one I look forward to."
Hill's departure means that there are now only three umpires from outside England and Australia in the 11-man Elite Panel list.
That means at present only Aleem Dar, Kumar Dharmasena and Marais Erasmus are qualified to stand in next year's Ashes series.
The lack of officials outside of England and Australia prompted the ICC to call Billy Bowden, who was dropped off the Elite List last year, in to stand in the Perth Test during the recently-completed series.
Hill was the third umpire in three matches during this winter's Ashes, with his last appointment coming in the final Test at Sydney.