Kaye will remain with Engine-owned Mischief as a consultant until the end of 2013 and is helping in the search for his replacement, expected in the autumn.
The announcement of his departure to pursue other interests comes as Daniel Glover is made chairman of the agency.
Mitchell Kaye, who launched the agency in 2006, said: ‘When I set up Mischief back in 2006 I wanted to create an agency that disrupted the industry and quickly became known for its work. Our focus in that time has been on the creative output – and impact – we have for our clients. I am proud to be leaving behind a legacy of talented people and great work.
'It has been an incredibly difficult decision to step down, but it feels like the right time for me. Joining Engine has improved every aspect of the agency, and in that time we’ve assembled a strong, dynamic management team who have already made 2013 a record year for the agency.’
Glover, who has been at Mischief since 2006 and is responsible for the creative output of agency, will also become an executive at Engine, which bought the agency in July 2011.
He said: 'I’m incredibly proud of the work Mischief has produced for its clients over the last seven years, but now is the time to fully realise the potential of the Engine model and use the best-in-class specialists within the building to give our business-changing ideas the impact they deserve.
'Our clients want this, our staff want this and having worked hard to put the right structure in place, Mischief is uniquely positioned to offer it.'