The TEC will then focus on providing careers information and helping people move from education to employment.
In announcing the change, Minister for Tertiary Education, Skills and Employment Steven Joyce and Education Minister Hekia Parata said funding for careers advice would continue at the same level.
The Careers NZ brand would also continue.
"We want students to make informed decisions about their future career, so they can set themselves up with a job and a future they're passionate about, while at the same time providing skills where they're needed," Mr Joyce said.
Today's announcement comes after the Ministry of Education began a review of Careers NZ in November 2014. That review was later widened to look at the careers system as a whole.