The musician and composer, who was at the helm of the helm for the 12th time, is to step aside under its biggest ever organisational shake-up.
He has admitted to feeling under growing pressure due to the amount of work involved in overseeing the event, which featured more than 350 concerts on 28 stages this year.
However Shaw will remain heavily involved as a “creative producer” - masterminding special commissions, one-off shows and major projects like Bothy Culture and Beyond, which was staged at the Hydro and shown by BBC Scotland.
A team of guest programmers will be brought in to work under Shaw and festival manager Jade Hewat, one of a handful of staff at the city counc-funded trust Glasgow Life who work year round on the festival, which sold around 80 per cent of tickets this year.
Shaw has previously warned that the festival, which has had standstill funding from Glasgow City Council and Creative Scotland in recent years, was “over-stretched and under-resourced”.
Shaw has confirmed he would be “stepping aside” for the 2019 festival just weeks after it emerged he brokered a deal which will see it given direct funding from the Scottish Government for the first time to the tune of Â£100,000 a year. His role is expected to include forging new international collaborations and securing overseas funding.
Shaw said: “I am genuinely committed to the festival. This not really about me. It’s about what’s good for the festival. But I felt over the last year that the pressure was getting to me and that I wanted to change the way I work within the festival.
"It is now too big and important a festival to focus it on just one person programming it. It takes me away from being the focus of the event. I think it's right to focus on how the event is run and programmed. It's going to be reviewed over the next year.
“This has probably been on my mind for the last two or three years. The core team at the moment, which is really only five people, have a huge amount of commitment to and passion for the festival. We’ve never really questioned the amount of time and effort involved in delivering it in its current model. But it got to the point where it felt we were stretched from the point of view of both resources and funding.
“As you build a festival as bespoke as this, with its very different types of audiences, shows and venues, it can take two or three years to perfect each strand and how you deliver it. We’ve almost been learning from our mistakes.
“We literally go from one year to the next. As you come out of one festival we start look at projects for the following one. There’s not a lot of time to stand back and review things.
“It’s not really been a case of us asking for more resources and being told we can’t get them. But we have to make a clear case for them.
"We didn't get any extra public funding at all for the Hydro show this year. It was purely paid for through box office income.
We put it on to mark the journey Celtic Connections has been on over the 25 years and also to show that this is the plateau this music can sit on.
"Over the last few years I’ve been working on another four or five big shows like the one we just did at the Hydro but we’ve just not had the funding to do them.
"Another thing that we have discovered that is becoming a big part of the Scottish music scene is a lot of artists want to connect with film, spoken word, visuals and theatre in their shows.
"It's often no longer a straightforward situation of a stage with a few musicians on it. The energy needs to come from the artist. But can foresee that becoming more commonplace in the programme. There is not a huge drive to make the festival bigger. It is at a very good size. We will continue to programme the best music we can. That's always been at the heart of the festival."
Glasgow Life chair David McDonald said: ““It’s been another phenomenal year for Celtic Connections with the 25th anniversary festival breaking all records yet again.
"There is nothing that compares to Celtic Connections and it is a huge part of our year-round cultural calendar, providing much needed entertainment and economic cheer to the city during the darkest winter months.
"Our first 25 years have seen the festival grow into a world-beater. I can’t wait to see what is to come as we move forward with the city’s musical ambitions.”