She believes that with prudent planning she can remain competitive internationally without reverting back to the long and lonely life as a European-based rider.
"I am still very passionate about cycling and the Orica-AIS team has been excellent," Villumsen said. "But the show must go on, and with or without me in the team they will be great. I will follow how everyone gets on in Europe while I will stay focused on reaching my own goals.
"I took on the nickname 'Gypsy' through the last season, simply because I have belongings spread around the world and right now I feel it is time to stay settled for a while. Given that 2013 is not a massive season, I believe it is time to experiment with an alternative kind of season.
"New Zealand is my home and I only get to live here for a few months really over the summer. I have usually trained on my own so I know that I can keep up my training and maybe race here against some of the men perhaps and that way still reach a top level.
"I want to start to think about a career as well when my competitive cycling days are over and I have been working with High Performance Sport New Zealand on this. I have received amazing support so far from them as well as BikeNZ.
"But I think I can be a stronger, better and happier cyclist if I can live in New Zealand. I still love this sport, and I am very grateful to Orica-AIS who have said they will welcome me back if this does not work out."
BikeNZ high performance director Mark Elliott said he supported Villumsen's plans.
"We completely understand Linda's position. Equally we have talked through all the ramifications with her of being based in New Zealand," Elliott said.
"Linda has an incredible work ethic and if any cyclist in the world can make this work, it will be her. She has our complete support and confidence. One upside is that cyclists in this country will be able to see more of her out on the roads training and in competition."
Villumsen's first mission is the Calder Stewart Elite Road Nationals in Christchurch next month, although by her own admission she will be far from race fit as she begins her long training programme aimed at next year's world championships in Italy next September.