Melbourne Stars coach Stephen Fleming has stepped down after four seasons in charge, having witnessed his team lost to city rivals Renegades in this year's Big Bash League final.

The former New Zealand captain said it was the right time for him to step down.

"I feel the time is right for me to step down and allow someone else to take the reins and the club forward," he said in a statement late Wednesday.

"The club is in very good shape having rebounded from last in BBL 07 to grand finalist this season."

His decision follows fellow former New Zealand skipper Daniel Vettori opting not to renew his contract with Brisbane Heat.

Stars president Eddie McGuire said Fleming had been "a wonderful servant".

"He has left a large footprint on the club which we will be forever grateful for," he added.

Glenn Maxwell's Stars were on the course to win the BBL final last month.

Chasing 146 to win against Aaron Finch's Renegades, they were 93 without loss and cruising before losing seven wickets for 19 runs to slump to a 13-run defeat.