South Sydney's 2014 premiership-winning coach has been linked with the job vacated by Brad Fittler since October, when the New South Wales Rugby League tabled him a one-year deal.
But questions remained as to Maguire's ability to juggle the new position with his head-coaching portfolio at the Kiwis, whom he joined in 2018.
Maguire oversaw a resurgence of New Zealand's national program and said last month that guiding the Kiwis to a World Cup victory in 2025 was his top priority.
The 49-year-old had deferred any decisions about the mooted Blues position until after the Pacific Championships that New Zealand won in early November.
The Michael Maguire-led Kiwis celebrate after beating Australia in the Pacific Championships final. (Andrew Cornaga/AAP PHOTOS)
On Friday, the Kiwis confirmed Maguire had chosen to step down, only seven months after signing a contract extension to remain in charge through 2025.
"The mana, history and whakapapa associated with the black and white jersey mean any role in and around the Kiwi team is the ultimate privilege," said NZRL chief executive Greg Peters.
"Michael's dedication to the role and players has seen him achieve incredible things over the last six years.
"Michael is the ultimate professional and has connected deeply with the NZRL wh�nau and playing group. We wish him nothing but success in his next career step."
Maguire won 12 of 18 Test matches as coach of the Kiwis, who appointed him following their worst-ever World Cup result - a quarter-final loss to Fiji in 2017.
His last match, a record-breaking 30-0 defeat of Australia in the Pacific Championships final, is likely to be remembered as his crowning achievement.
Maguire is also an assistant coach to Ricky Stuart at NRL side Canberra but the Raiders have already indicated he could juggle that position with the Blues job if he chose to take it.
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