Former New Zealand international Hammett has been in charge at Cardiff Blues throughout the 2014/15 season at BT Sport Cardiff Arms Park.
However, Hammett has now asked to leave his role and return home with his family at the earliest opportunity, citing personal reasons.
It is with deep regret and disappointment that his decision has been accepted by the Board of Directors at Cardiff Blues.
Richard Holland, Chief Executive at Cardiff Blues, said: "We were naturally very disappointed and surprised when Mark informed us of his decision. However, we fully understand the personal reasons he has given and he has our full support.
"We appointed Mark last summer as part of a long-term vision for Cardiff Blues. He has worked tirelessly in the role since his arrival in Wales and we always felt Mark was the right man to take us forward, right up until his decision to leave.
"Mark has made a number of positive changes that will benefit our region for years to come. He leaves us in a stronger position than when he arrived and I'd like to thank him for his contribution during this season.
"Having spoken to Mark at length, I know he's not taken this decision lightly. However he feels he must return to New Zealand. We fully respect the decision he has made with his family and, on behalf of all the staff at Cardiff Blues, I wish them every success in the future."
Mark Hammett said: "I have enjoyed my time with Cardiff Blues and it was always my intention to bring success to the region over the full length of my contract. However, I must put my family first and therefore it is with regret that I am leaving the role.
"I'd like thank Peter Thomas and the Board of Directors for their support in allowing me to return home as soon as possible. I would also like to pay tribute to the amazing fans at Cardiff Blues for their backing throughout my time here and I hope they understand the difficult decision I have now made.
"I wish the region every success and look forward to seeing the team develop in the coming years. Finally, I'd like to make a personal thank you to the players and staff for their hard work and dedication."
The current coaching staff at Cardiff Blues will now take charge of senior team matters ahead of this weekend's game with Edinburgh Rugby as the region begins to plan for the future.
"We now look to take the region forward under new leadership and, as we did when we appointed Mark, we will take our time and involve the right people to help us to make the right decisions for Cardiff Blues," added Richard Holland.
"I'd like to thank our fans for their support during this difficult period and stress to them that we are determined to put the right structures in place to ensure a successful future for their region.
"We have a very talented squad of players and coaching staff at Cardiff Blues and I know they will rally together in the coming weeks to as we look forward to a big European quarter-final with Dragons and a number of important Guinness PRO12 fixtures."
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