McFadden joined the Warriors as an assistant coach in 2013 before spending almost three seasons as head coach from 2014-2016.
He has continued in an assistant coaching role since then.
"This is Cappy's sixth year with us and he has given the club tremendous service," Warriors CEO Cameron George said in a statement.
"We'd love to see him stay but he has a growing young family and it's important to think about their future.
"We can't say enough about what Cappy has done for the club so far and there's plenty more ahead this year before he finishes."
McFadden said his focus now is solely on the season ahead.
"It was important to give Cameron, Stephen [Kearney] and the club plenty of notice about our plans to go home," he said.
"That's for the future. All that matters now is what's ahead of us this season."
Canberra-born McFadden (40) was Warriors head coach for 67 matches.
