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Leon MacDonald will replace him has head coach with Umaga staying on as defensive coach for the next two years.
The Blues announced in May that Umaga's contract had been extended into a fourth year. MacDonald will take the role on as part of a three-year deal.
MacDonald will retain the attack portfolio alongside Tom Coventry as the forwards coach and Daniel Halangahu as the skills and back coach.
Umaga has coached the Blues for the past three years, during which the franchise has finished 11th, ninth and 14th.
"After the end of season review I signalled that my passion lies with my new responsibility as defence coach and I believe that is where I can make the greatest contribution and difference at the Blues," said Umaga in a statement.
"I support the decision to appoint Leon and I believe that the coaching team of Leon, Tom and myself is the best that we could have at the Blues for the 2019 season and beyond."
MacDonald, the 56-Test All Black, got involved in the coaching environment at the Tasman Mako after his retirement from playing in 2010, before becoming assistant coach at the Crusaders in 2017. He then returned to coach the Mako in 2017 and 2018 and coached with Umaga at the New Zealand Under-20s campaign in 2015.
"I am highly motivated to help with the Blues' vision for success," said MacDonald. "I decided to move to the Blues to work with Tana and with Tom Coventry, and nothing has changed in that respect.
"This opportunity has arisen and I am honoured to have been considered for the role. I will give it my heart and soul. I've also talked to Tana and Tom and both of them are both hugely supportive and also very committed to our combined desire to continue to move this club forward."
Umaga's record with the Blues:
2016 - Won 8, Lost 6, Drew 1 - Finished 11th
2017 - Won 7, Lost 7, Drew 1 - Finished 9th
2018 - Won 4, Lost 12 - Finished 14th