Stirling added that he remains "fully committed" to Ireland despite ending his captaincy.
"I still have a huge amount of ambition as a player and feel this decision will allow me to fully focus on being the best version of myself and making the strongest possible contribution on the field," he said.
"This feels like the right time for the team to move into a new chapter, and I wish whoever takes on the T20 captaincy every success.
"They will have my full support, and I look forward to working alongside them as we continue to build and push for success on the international stage.
"Representing Ireland remains the greatest privilege of my career and I am as motivated as ever to help the team continue to grow and achieve success in the years ahead."
Cricket Ireland director of high performance Graeme West praised Stirling as an "outstanding leader".
"He will continue to captain the ODI squad with the initial goal to successfully navigate qualification and lead the team in ICC Men's Cricket World Cup next October-November," added West.
"With qualification secured for the T20 World Cup in 2028, Paul's decision to stand down as T20 captain provides the opportunity for the new captain to begin implementing their style and methodology, starting with the India series in June."

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