Mahbubani, 69, has been at the helm of the LKY School since it was established in 2004 at the National University of Singapore (NUS).
Prior to his appointment at LKY School, Mahbubani had served 33 years in the foreign service. The top Singapore diplomat was the permanent secretary of the Ministry of Foreign Affairs from 1993 to 1998, an NUS statement said.
As a diplomat, he was posted in Cambodia, Malaysia and Washington DC, and also served as ambassador to the United Nations as well as president of the UN Security Council.
Mahbubani said it has been an "incredible privilege" to be the dean of LKY School, an autonomous postgraduate school of NUS.
"After 13 years, it is timely for a new leadership to take the school to greater heights...I look forward to the opportunity of the nine-month sabbatical to expand and deepen my research and writing."
Mahbubani will retire on December 31 but remain a faculty member of NUS. An acting dean will be appointed from January 1 next year while a search process is initiated for the next dean, the NUS said.