The move comes as the 5,000 member strong church begins its transition to divide into three new congregations in the city.
The decision was announced at all eight of the church's Sunday services yesterday. He will remain in his role until 1st July.
Keller, 66, will not be retiring completely; instead, he will take on a full-time teaching position in a programme with the Reformed Theological Seminary.
His wife, Kathy Keller told Christianity Today: "There's a certain level of him that's going to mourn the connection with a congregation and being their pastor."
"It's a loss. But there's also something very exciting that he's going to."
Big day for @RedeemerNYC, as @timkellernyc announced he's stepping down as senior pastor as of July 1. Perfect hymn followed. pic.twitter.com/5HBuoagRYd
— Bethany Jenkins (@BethanyJenkins) February 26, 2017
Keller has written a number of books about the Christian faith including best sellers The Reason for God: Belief in an Age of Skepticism, The Prodigal God: Recovering the Heart of the Christian Faith, and Prayer: Experiencing Awe and Intimacy with God.
Newsweek once described him as the "CS Lewis of the 21st Century".
Under his leadership, the Redeemer Presbytarian Church grew from 50 to 5,000 members.