"This decision to resign was not an easy one and it is based primarily on me wanting to focus more of my time on my young family," Smit said on the team website.
"I look forward both to the next challenge in my career and to remaining a frequent visitor to Kings Park, my home from home since I was 18 years old."
Smit captained South Africa to World Cup triumph in 2007 and with 111 appearances is the third most-capped Springbok.
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He was appointed as Sharks boss in mid-2013 after finishing his playing career at Saracens in England.
While the Durban franchise reported a financial turnaround during his tenure, they have been struggling to match expectations on the field.
(Reporting by Mark Gleeson in Cape Town; Editing by Amlan Chakraborty)
