In a statement Haunui Royal, general manager of programming, said the decision was made in October after an extensive review of all major programmes.
It was not common practice to involve presenters in discussions, he said. Additionally, the presenter would remain as a commissioner at the station and a new programme - details of which were not released - is being developed for him.
Mr Royal said: "Matai is a fantastic presenter with a strong future at Maori Television. As such, we feel it's time to develop a new show that takes full advantage of his considerable talent."
Smith's television career has spanned 17 years, starting on Marae and te reo programmes, but light entertainment is where he has found a niche. This year, he'll be reprising his role as a Good Morning guest host at TVNZ.
Radio Waatea drivetime host Brent Mio and Pikiteora Mura-Hita, a 2008 winner of the show, will replace him. Other changes include the show reducing in length from 90 minutes to one hour this season.
Media commentators were taken aback by the switch. Duncan Garner tweeted: "Matai Smith brilliant award winning broadcaster/host/presenter loses his job as host of Homai te Paki Paki at MTS - WTF!"
Willie Jackson, who is Mio's boss at Radio Waatea, said the switch was odd but it was the nature of a fickle industry.