BikeNZ high performance director Mark Elliott said the organisation was saddened with Grace's decision but understood his position.
"Justin has been responsible for developing the sprint programme from scratch to its current high world ranking. They are now ranked second in track priorities to the men's endurance group looking ahead to the Rio Olympics,'' Elliott said.
"Justin believed fervently that New Zealand could produce world class sprinters in this sport and has driven this programme with a single-minded and uncompromising passion.
"That approach comes with a price and we want to acknowledge his tremendous contribution and the support from his wife and family.''
Elliott said that a programme of sports science, strength and conditioning and coach support had been well established and would cater for the riders in the immediate future.
"We will look at our short term needs and how we can fill them with the squad to head to Europe later this month for training and racing but the medium term goal would ideally be for a fulltime sprint coach when the centralised programme gets underway in Cambridge next year.''