The 62-year-old Dutchman told reporters he had quit after being diagnosed with heart arrhythmia that may require surgery.
"I am sorry to be leaving the club in this difficult situation but I think everyone will understand that my health takes priority," Stevens, who has had more than a half dozen coaching stops in the Bundesliga and also won the UEFA Cup with Schalke 04 in 1997, told a news conference.
"I took my decision following the advice of doctors.
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"You have to be 100 percent fit and I am not. It was a big risk for me to continue. I don't have a lot of years left, but I want to make the most of the ones I have left," he said.
Stevens, who saved VfB Stuttgart from relegation in the past two seasons after twice taking over midway through the campaigns, replaced Markus Gisdol at Hoffenheim in October.
But after 10 matches in charge Hoffenheim have managed one victory and are languishing in 17th place on 14 points, level with bottom side Hanover 96.
Assistant coaches Alfred Schreuder and Armin Reutershahn have taken charge for now, with youth team coach Julian Nagelsmann set to take the reins next season.
Hoffenheim, backed by billionaire and SAP co-founder Dietmar Hopp, shot up through the minor leagues before winning promotion to the top division in 2008.
Stevens, who has also coached Hertha Berlin, Hamburg SV and Cologne among others, had signed a deal with Hoffenheim until the end of the season.
(Reporting by Karolos Grohmann; Editing by Ken Ferris and Justin Palmer)
