Brailsford has led Britain's cyclists to an unprecedented period of success, with eight gold medals at the Beijing and London Olympics and has arguably been more influential than any other person in turning cycling into a mainstream sport in this country.
The 50-year-old Welshman also established Team Sky, winning the Tour de France through Sir Bradley Wiggins in 2012 and Chris Froome in 2013.
Now Brailsford has decided to concentrate on his role as Team Sky principal, leaving British Cycling looking for a new figurehead in the lead up to the Rio de Janeiro Olympics in two years' time.
The success of Team Sky has effectively forced Brailsford's hand as he has determined that the two jobs have become too big for one man to combine.
This is gearing up to be another big year for Team Sky with the Tour de France starting in Yorkshire and the Giro d'Italia in Belfast.
The team is also opening a new performance centre in the south of France which would have pulled Brailsford away from British Cycling's Manchester base.
Brailsford, who considered his future with British Cycling after the London Olympics before deciding to stay on, has missed two successive world track championships due to Team Sky commitments, including February's event in Cali, Colombia where a disappointing performance prompted a fresh review of team operations.
Brailsford has also found his expertise in demand from outside of cycling and he is to address England's footballers ahead of the World Cup, although he remains committed to cycling as his primary focus.
A statement from British Cycling is expected later on Friday.
Braildford joined British Cycling in 1997 and took over as performance director when Peter Keen left in 2003.
His focus on mental preparation and the exploitation of "marginal gains" revolutionised the culture of the sport and led to a glittering array of honours. Brailsford was knighted after the London Games.