The club had announced on Monday that the former European Footballer of the Year was returning from a brief leave of absence.
But in a dramatic twist to the saga, the 49-year-old told a news conference that stress, which led to heart palpitations, meant he could no longer work as head coach and would never again do so.
"The stress I experienced as a head coach was much more than I would have liked," he said, adding that he had suffered no physical discomfort over the past three weeks.
"It (the palpitations) has happened to me several times over the last years. I thought I could overcome it and that things would get better," said the former Dutch international striker.
"I worked hard at recovery and followed the necessary courses of treatment. I wanted to keep going but they kept coming back. There were two solutions: to do something else or to change the way I currently work.
"That is why I asked AZ to change my responsibility to better suit me and so that I can continue," he added.
Dutch media had reported on Friday that Van Basten, who coached the Netherlands at the 2006 World Cup in Germany and turns 50 in October, was quitting after missing the club’s last two matches.
(Reporting by Mark Gleeson; Editing by Alan Baldwin)
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