Billings, who made three Test appearances in 2022 - most recently in England's seven-wicket win against India at Edgbaston - opted out of a stint with Kolkata Knight Riders in the IPL to focus on his role at Kent.
However, he has endured a grim run of form in the County Championship, making 92 runs in 10 innings, including three ducks and a highest score of 31.
Kent are currently second-from-bottom of the Division One standings, with one win from seven matches, and Billings' form prompted him to leave himself out of their most recent Championship match, a five-wicket loss to table-toppers Surrey at Canterbury.
"Kent cricket can confirm that men's captain, Sam Billings, has decided to step down as captain in red-ball cricket for the rest of the 2023 season," a club statement read.
"Jack Leaning, who captained Kent against Surrey last time out in the Championship, will captain the side in Sam's absence.
"Billings will continue to lead the side in the Vitality Blast and remains the club captain in men's cricket."
His fortunes as white-ball captain have been rather better, however. Kent have won their last six T20 Blast games under Billings' leadership, and are currently fourth in the South Group, with a place in the quarter-finals within their grasp.
Kent have named a 13-man squad for their trip to Northamptonshire, who are the only team below them in the current Division One standings.
Arafat Bhuiyan, Arshdeep Singh and Matt Quinn all feature after not being involved in the Blast, while Ben Compton is set to slot back in at the top of the order. Harry Finch is included in the first XI squad after impressing in the Second XI Championship, Michael Hogan and Grant Stewart have been rested to focus on this week's Blast contest against Sussex.