The former Wales Under-20s has been in charge at Arms Park since 2015, guiding them to consecutive seventh-place finishes in the Pro12 over the last two seasons.
Wilson, who has formerly worked with Dragons, the Scarlets and Bristol as a forwards' coach, has clearly impressed the Cardiff hierarchy, who wanted to offer him a new deal, only for him to decide to walk away from the capital club at the end of the campaign.
Rumors have circulated for some time that Northampton Saints want to bring him to the Aviva Premiership as their forwards' coach and the path has now been cleared following his resignation.
"It is disappointing that Danny has decided not to take up the offer of a new contract and will not be part of our strategy moving forward," Blues chief executive Richard Holland said.
"We will begin the process of finding a successor immediately, and we will consult key individuals to ensure we make the right appointment for Cardiff Blues."
In a statement released by the Blues, Wilson added: "This was obviously a very difficult decision to make, and I am very grateful to Cardiff Blues for the opportunities they have given to me. I will be fully committed to Cardiff Blues for the remainder of my time here and am now solely focused on this weekend's match with Munster.