Sophie and Edward have had a difficult few months
Prince Edward said they would fulfil current obligations with their separate companies before leaving.
The reason for their decision is to support the Queen during her Golden Jubilee, but the move is permanent.
The Queen and Duke of Edinburgh reportedly support the decision.
The Earl said: "It is quite obvious that in this year, the Golden Jubilee, we are required more than ever to support the Queen and to help my family shoulder some of the increasing responsibilities and workload into the future."
A spokeswoman for the couple said they would focus on charity work. They are now expected to extend the list of charities they support.
The couple said they were very proud of their companies and wished them all the best.
Prince Edward said setting up his own production company, Ardent Productions, had been his biggest challenge but it had been "enormous fun, immensely rewarding and full of surprises".
'Rewarding
"Working and playing hard is fine as long as it is fun and rewarding," he added.
"Yet I always knew in the back of my mind that one day things would have to change. Well, that day has come - not just for me, but also for my wife.
"Life, whether business or leisure, is about goals, overcoming the hurdles and setbacks, enjoying the successes and recognising achievement - but above all, it has to be fun."
Ardent Productions said it fully endorsed Prince Edward's decision to step down as director of production and joint managing director.
It would take effect from 31 March - but he would remain a director "until such time as he is able to fulfil his current contractual obligations", the statement said.
Chairman Malcolm Cockren added that working with the Earl had been a "pleasure and privilege".
The company will move from Edward and Sophie's Bagshot Park estate in Surrey.
RJH Public Relations said the Countess would stop drawing a salary and reduce her controlling share interest to that of a minority shareholder.
She would give up her duties as an executive director to become a non-executive director, it added.
Criticism
Chief executive Jack Cassidy said: "Sophie has founded and built an extraordinarily successful company.
"My co-directors and I consider ourselves fortunate to be able to build on the strong base."
It has been a difficult time for Sophie and Edward, who married in June 1999.
In December the countess lost their baby following an ectopic pregnancy.
The previous April, she was embroiled in controversy when she was the victim of a newspaper sting.
The affair intensified criticism of her dual role as a Royal and businesswoman and she was widely attacked for allegedly using her royal status to win lucrative contracts.
Last month, broadcaster Channel 5 launched an investigation into a documentary made by Edward's production company after a newspaper reported it had been faked.
Ardent was set up in 1993 by Edward and since then has made more than 60 hours of programmes for broadcast, according to the company's website.
Last year Ardent was also forced to hand footage shot by its crew at Prince William's university to Buckingham Palace.
Ardent was accused of trying to film the prince in breach of the understanding reached with all sections of the news media.