The 34-year-old has led New Zealand in 56 T20s (25 wins, 28 losses, 1 tied), first captaining the side in a handful of games in 2014-15 before assuming the permanent role in both formats from Amy Satterthwaite in 2020.
Devine, who debuted for New Zealand in 2006 and has played 135 T20Is, said her desire to find a more balanced workload led to her decision to step down as T20 captain.
"I'm very proud to have had the privilege to captain the White Ferns in both formats," said Devine.
"With captaincy comes an additional workload that, while I've enjoyed taking on, can also be challenging at times.
"Stepping away from the T20 captaincy will take a bit off my plate so I can focus more of my energy on my playing role and nurturing the future leaders."
Devine, who is currently undertaking a period of rest to rehabilitate a foot injury, will continue to lead the White Ferns in ODI cricket and reiterated her desire to continue playing both formats for New Zealand.
"I'm not ready to give up ODI captaincy just yet," she said.
"But I won't be around forever, so I think stepping away from captaining one format at a time gives the next leaders time to find their feet."
White Ferns head coach Ben Sawyer said he was fully supportive of Devine's decision.
"Soph is the epitome of a fearless leader and we're really grateful for the leadership she brings to this group on and off the field," said Sawyer.
"She's one of the most experienced White Ferns ever and her leadership and knowledge of the game has been so valuable as we have introduced several young players into the team over the past two years.
"I know the decision wasn't easy for Soph, but I fully support it and know that she's still going to be a prominent leader in the group."
New Zealand Cricket boss Scott Weenink was pleased Devine would continue to play a role in the team.
"We're grateful to have a player of Sophie's calibre in the White Ferns and I'm delighted that she is still committed to captaining the ODI team," Weenink said.
The White Ferns 15-player squad for the T20 World Cup in October will be announced on 10 September.
The squad departs on 16 September to play three T20s against Australia in Mackay and Brisbane in preparation for the World Cup.
Following the World Cup, the White Ferns next T20 series will be in March at home against Sri Lanka.
A decision on who will succeed Devine as T20 captain will be made in due course.
