The academy guru will leave Chelsea after 30 years of involvement.
Bath will stay on as a caretaker ahead of Chelsea deciding on a successor.
"After 30 years working at Chelsea, I feel it is the right time for me to have some time off and take a break from a job that I have put so much time into," he told chelseafc.com.
"I intend to rest and have some time away from the game, however I will continue working over the coming weeks to ensure a smooth transition for the organisation.
"As an Academy, we have enjoyed fantastic backing from the Club throughout my time here, without which none of our success would have been possible.
"I would like to thank every single person - player, parent, colleague, supporter - who has been on this journey with us. We achieved everything we could possibly have dreamed of - five Youth Cups in a row, countless debuts, homegrown players helping the team win the Champions League - and we did it together.
"In particular, I have to mention Jim Fraser, who has assisted me for the past 20 years and played such an important role in everything we have achieved.
"As a boy from Battersea who grew up on the Shed watching our teams of the 80s, it has been my greatest privilege playing a part in the club's success over the past two decades. I have made memories and friends that will last a lifetime. I hope we have made people proud and left the club in a better place to move forward."
The Chelsea Ownership Group said: "Neil built the foundations for the Chelsea academy at Cobham and his unwavering commitment, dedication and pursuit of excellence set unparalleled standards across the sport. His legacy will live on and the most fitting tribute we can give to him for more than 30 years’ service is to uphold those standards in the years to come."
Sporting Directors Laurence Stewart and Paul Winstanley said: "Neil’s legacy in football will stand the test of time. His contribution to not only the success of our Academy but youth football across the world cannot be understated. He has been a pleasure to work with since we joined the Club, illustrating the very highest of work ethics and commitment."