Lythgoe was known for his 'Nasty Nigel' persona on Popstars
The British TV producer partly responsible for the huge success of American Idol is stepping down from his role as executive producer on the show.
Nigel Lythgoe will devote more time to his other TV show, So You Think You Can Dance? where he acts as a judge.
He will also begin work on a new project with American Idol creator Simon Fuller.
Lythgoe found fame in the UK as judge "Nasty Nigel" on ITV1's Popstars in 2000, which spawned pop group Hear'Say.
"Due to the huge success of So You Think You Can Dance?, my summer will be taken up by travels to South Africa, Australia and Canada to work on local versions of the show," Lythgoe said in a statement to celebrity website TMZ.
"I will step back from my day-to-day producing work on American Idol and will be devoting my time to a new venture with Simon Fuller.
"He is without doubt, a man of vision, and I look forward to partnering with him on new and exciting challenges in all forms of entertainment," he added.
Television network Fox congratulated Lythgoe on his new venture but acknowledged it was "disappointed" that he would not be continuing as executive producer.
"He is an extraordinarily talented producer whose creative contributions to the number one show on television have been immeasurable," it said in a statement.