It is unclear if he will pursue a coaching position in New Zealand. He quit the Black Caps post a year early in 2008, after they had slumped to eighth in the test rankings, choosing to return to England for a second stint with Gloucestershire.
Ireland have endured modest one-day international results for the past two years under Bracewell. Those performances, with an ageing team, were defended by Cricket Ireland performance director Richard Holdsworth.
"The last two years have been a difficult period of transition and rebuilding in which John has tried to nurture inexperienced talent against the best teams in the world."
Bracewell said he took enormous satisfaction at helping oversee the Irish promotion to test level.
"I took on the role as head coach, because I believed in the little guy getting a fair break and the cause of attaining test status appealed to my underdog psyche."