Trevor Hohns is the selection chairman along with national talent manager Greg Chappell and newly appointed coach Justin Langer.
Waugh has opted to leave the role when his contract expires on August 31 to take up a commentary role with Fox Sports, and will finish following the tours of England and Zimbabwe.
The 52-year-old will be joining pay-tv company Fox Sports, which along with the free-to-air Seven Network won a bidding war last month for television and digital cricket rights in Australia in a six-year deal worth nearly Aus$1.2 billion (US$918 million).
Waugh's last set of selection assignments will include picking the squads for a five-match ODI and a one-off T20 match in England.
Waugh, who played 128 Tests and 244 one-dayers for Australia, has been a selector since 2014, focusing mostly on Twenty20s but also providing input on the one-day global and Test teams.
In 2017, Waugh's role on the panel transitioned to focus specifically on the T20I format, as part of a two-man panel also including the Australian team head coach.
"Being a selector is not an easy task, and Mark has made an important contribution to Australia's on-field success alongside his fellow panel members".
Announcing the news, Waugh said it was a really tough decision to opt to not continue at his role, adding that he had thoroughly enjoyed his time with the national selection panel.
"We're disappointed to lose Mark, but wish him all the best in his new role and we are pleased he will still have heavy involvement in the game", CA high performance boss Pat Howard said.
Waugh had previously commentated on Network Ten's coverage of the Big Bash League since 2013, and had been involved with Fox's broadcast of the tournament prior to its move to Ten.
Waugh, whose commentary duties are expected to cover all formats of the game, was joined by Mel Jones, Mike Hussey, Isa Guha and Michael Vaughan in joining the pay-tv broadcaster's commentary team.