Julian Nagelsmann will leave Hoffenheim at the end of the 2018-19 season, the Bundesliga club have announced.
Appointed in February 2016, the 30-year-old has led Hoffenheim to successive top-four league finishes, and they will start his final campaign in the group stages of the Champions League.
Despite being under contract until June 2021, the highly-rated head coach has triggered an exit clause in his deal.
While linked with Arsenal, Bayern Munich and Real Madrid in the past, media reports in Germany suggest Nagelsmann is set to move to domestic rivals RB Leipzig.
"It was important to me to ensure clear conditions," Nagelsmann said in a statement on the club's website.
"I owe it to Hoffenheim and all of its employees, as well as to the team and the fans, in a historic season in which we are competing in the Champions League for the first time, not to have constant assumptions about me and my future. Now everyone knows and we can focus professionally on the upcoming, difficult tasks.
"Everyone knows that I will be burning and doing everything I can to reach our ambitious goals until the last hour of my commitment to Hoffenheim."
Hoffenheim will not rush to announce a replacement for Nagelsmann, who took charge after Huub Stevens stepped down due to health reasons.
"We knew about the contractual option, which is not exceptional in professional football," director of football Alexander Rosen said.
"It speaks for the character of Julian, that he has now laid the cards publicly on the table and created so early for all clarity."