He will give up the post following the intense scrutiny he faced earlier this year over his relationships with a series of controversial figures, including a convicted paedophile.
The Duke has been dogged by accusations of a lack of judgment about his links with American billionaire Jeffrey Epstein, who was sentenced to 18 months in prison in 2008 for soliciting a minor for prostitution.
The Duke has been dogged by accusations of a lack of judgment about his links with billionaire Jeffrey Epstein (right), who was sentenced to 18 months in prison in 2008 for soliciting a minor for prostitution
Andrew has been the UK's Special Representative for International Trade and Investment since 2001. Here he is seen at a presentation in Hong Kong
A Buckingham Palace spokeswoman said: 'The role as Special Representative will no longer exist as the Duke of York has decided to relinquish it after 10 years.'
The spokeswoman stressed that Andrew would continue to undertake official overseas trips as a member of the Royal Family in support of Britain's foreign interest.
Further doubts were raised about Andrew's position in the wake of media coverage about him entertaining the son-in-law of ousted Tunisian president Zine El Abidine Ben Ali at Buckingham Palace.
But as the criticism mounted in March, he received the backing of Prime Minister David Cameron and Chancellor George Osborne.
Andrew has been the UK's Special Representative for International Trade and Investment since 2001, travelling around the world and at home promoting Britain's business interests.
But there have also been long-running complaints about the lavish nature of his official foreign trips.
However, he is set to continue to work on home-based trade matters.
A source told the Daily Mail: 'With No.10 keen to develop the skills agenda and Andrew determined to use the knowledge he has built up over many years in his trade role, this seems the most sensible way forward.
'He will continue to bang the drum for UK plc, but it will be in terms of promoting business opportunities here, especially in the science and engineering fields.'
Calls for the Duke to resign or be removed from his role were made in March by Labour MP Chris Bryant, a former Foreign Office minister, and senior Labour backbencher Mike Gapes.
A leaked letter written by retired diplomat Stephen Day, a former ambassador to Qatar and Tunisia, to Foreign Secretary William Hague stated that an 'entirely new role should be found for him as soon as possible'.
At the height of the media interest the Duke pulled out of a business trip to Saudi Arabia.
But Buckingham Palace sources stressed the decision was 'nothing to do' with the press coverage and was made for safety reasons.
Andrew appeared to weather the storm and carried on with his public duties. He flew to Indonesia in April for a three-day business visit.
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