Air NZ said it expects to make an announcement on his replacement within six months.
Chairman John Palmer said Fyfe had been an "outstanding'' chief executive.
"He has ensured that Air New Zealand has remained profitable despite the backdrop of turbulent economic times that have seen airlines lose billions globally,'' Palmer said in a statement.
Fyfe, who was appointed in 2005, had given a commitment to the board that he would remain until 2012.
"The board respects that as a world class chief executive officer Rob wants to continue to challenge himself and explore new opportunities,'' Palmer said.
"He has also been clear with the board that he did not want to become a road block to the career aspirations of the executive management team and the decision to leave at the end of this year will create an opportunity for growth and renewal within that team at Air New Zealand,'' Palmer said.
Palmer said there would be significant international interest in the role, and that there were some strong candidates from within Air NZ's existing executive management team.
Air NZ is about 74 percent owned by the state. The government has said it intends to sell down its stake but retain majority control.
Air NZ shares last traded at $0.91 each.
