According to a release from the festival, Gudgin is leaving "to produce a variety of festival and event-related projects both in the UK and internationally."
Gudgin will stay in his position until June 7. Interviews for the position will take place in the spring.
The Edinburgh Festival Fringe, held each year in August, is touted as the world's largest arts festival. In 2006 it sold 1.5 million ticket to over 1,800 shows.
"I'm pleased that as an organization we've passed some impressive milestones and seen such exponential growth," Gudgin said in a statement. "But it's time for me to move on."
Before serving as director of the Fringe, Gugdin was general manager of the Queen's Hall, an Edinburgh venue that is home to the Scottish Chamber Orchestra and hosts Fringe events. Before his appointment to that position in 1995, he was manager of the Bury St. Edmunds Festival, a job he began in 1989 at the age of 25. For more information about the Edinburgh Festival Fringe, visit www.edfringe.com.