That move was largely interpreted as likely to cost him any chance of winning the All Blacks job, even after 2019. New Zealand Rugby has never appointed a coach from outside its accepted system of forcing All Blacks aspirants to come up through the Super Rugby coaching ranks first.
If Schmidt is to succeed Hansen in 2020, New Zealand Rugby would have to break that tradition.
Schmidt may force their hand if his remarkable coaching career continues, though.
After cutting his teeth with the Bay of Plenty in the National Provincial Championship before a stint as an assistant coach with the Blues, Schmidt headed overseas to further his career.
He took over the Irish national job in 2013 after a successful stint with leading province Leinster.
In his time at the helm, Schmidt led Ireland to back-to-back Six Nations titles in his first two years, reached the quarter finals of last year's World Cup, secured Ireland's first series victory in the southern hemisphere by beating Argentina last year and was able to guide Ireland to a test victory over the Springboks in South Africa for the first time in history in June.
Now he has further history in the books after today's epic first victory over the All Blacks in more than a century of attempts.
Schmidt's diligence is not just being seen at the elite end of the game. He is steadily building Irish rugby into a powerhouse.
The Ireland under-20 side reaching the final of this year's junior world championships was a positive sign for the future. Also, Irish provinces topped three of the five European Champions Cup pools this season.
Schmidt's coaching style has turned heads in the United Kingdom.
Former English and Lions back Will Greenwood says Schmidt reminds him of the late great English football manager Brian Clough.
"He has the style of a football manager," Greenwood says. "Some coaches pick players and then decide the style they want the team to play. Schmidt knows what he wants and then goes about persuading his players that his way is the best way to win a game.
He relies on his research and his ability to create a strategy that is efficient, exciting and full of surprises.
"He reminds me of Brian Clough and the way the legendary Nottingham Forrest manager described how he discussed tactics with his players: 'We talk about it for 20 minutes and then we decide I was right'. Schmidt knows that his record backs him up, and the clarity of thought and direction is the greatest gift he gives his teams. He trusts his players to deliver, and they trust him to have worked out the best way to beat the opposition."
