Williamson's decision marks the end of an era for a New Zealand team which made the semi-finals of the previous three T20 World Cups and the 2021 final, but ultimately missed out on a maiden white-ball title.
Fast bowler Lockie Ferguson has also indicated he will not take up a national contract, New Zealand Cricket (NZC) said on Wednesday, following the team's failure to make the Super Eight phase at the ongoing tournament.
One of the world's top batsmen and a campaigner of more than 350 internationals in Tests, one-day and T20 cricket, Williamson will continue to play for New Zealand in all three formats.
Kane Williamson cracks a cut shot against Afghanistan at the T20 World Cup in Guyana. (AP PHOTO)
However, he has opted to take up a contract outside of New Zealand in January, meaning he will be unavailable for part of the home summer.
"Pursuing an overseas opportunity during the New Zealand summer means I'm unable to accept a central contract offer," the 33-year-old said in a statement.
"Playing for New Zealand is something I treasure, and my desire to give back to the team remains undiminished.
"My life outside cricket has changed however - spending more time with my family and enjoying experiences with them at home or abroad is something that's even more important to me."
Williamson's likely destination in January is a T20 franchise league, with competitions running in several countries including Australia, South Africa and the United Arab Emirates.
He gave up the Test captaincy to Tim Southee in 2022, and there will be another changing of the guard as New Zealand look to rejuvenate before the next T20 World Cup in Sri Lanka and India in 2026.
Fast bowler Trent Boult, who opted out of a national contract in 2022, confirmed last Friday he had played his last T20 World Cup following the team's elimination from the tournament.
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NZC said Williamson would be available for eight Tests leading into Christmas and the ICC Champions Trophy in Pakistan in February-March.
The board said Williamson's decision to opt out of a contract would not hurt his chances of selection, a departure from its usual policy which favours contracted players.
"We're happy to make an exception for our greatest ever batter – especially as he remains so committed to the team," said NZC CEO Scott Weenink.
"This is a good way to help keep Kane in the international game so that he continues to play a major role for the Black Caps – both now and in the years to come."
