Saints made the announcement less than 24 hours after Brown guided the team to their first Grand Final since 2011.
The 41-year-old, who joined Saints at the start of 2013 after leaving Huddersfield, led the club to the League Leaders' Shield this year.
"Nathan has done a great job in rebuilding the squad over the last two seasons," said chairman Eamonn McManus.
"We are very strongly positioned indeed for the future."
Brown previously coached St George Illawarra Dragons and had been keen to return to the NRL - he recently applied for the Wests Tigers' job, which went instead to Jason Taylor.
In his first full season in charge at Langtree Park, Brown's side finished fifth and were beaten in the second week of the play-offs, losing by a single point to Leeds Rhinos.
St Helens won 19 of their games this term to finish top of the Super League table and end a six-year wait for silverware.
And victory over Catalan Dragons on Thursday ensured a spot in the Grand Final at Old Trafford on 11 October.
"Nathan received our blessing to apply for the Wests Tigers head coaching position and, although not successful, the same family reasons for a return home still pertained," added McManus.
"We therefore willingly agreed to grant him an early release regardless.
"The club's focus is now entirely on winning the Grand Final at Old Trafford next week.
"As it is Nathan's last game in charge, there is even more to play for and the motivation levels are even higher."
St Helens head coach Nathan Brown will leave the club at the end of the season and return to his native Australia.