"For a variety of personal and professional reasons I have chosen to discontinue my ongoing involvement with Nick Cave & The Bad Seeds," he said in a statement.
"After 25 years I feel I am leaving the band as it experiences one of its many peaks; in very healthy condition, and with fantastic prospects for the future."
Harvey founded the Bad Seeds in 1983 with Cave, with whom he'd worked in the band's predecessor, The Birthday Party.
"I'm confident Nick will continue to be a creative force and that this is the right time to pass on my artistic and managerial role to what has become a tremendous group of people who can support him in his endeavours both musically and organizationally," he said.
"It was a fantastic experience to finish my touring days in the band with the recent shows in Australia and the unique events that took place in conjunction with All Tomorrow's Parties, especially Mt. Buller, which was one of the many highlights of my involvement with the band throughout the years."
The statement also said he will continue working on a Bad Seeds re-issues project over the coming year.
