Matthews guided the Christchurch Anglican Church for the past decade through many tough times notably the Christchurch earthquakes, which devastated the cathedral in the city centre.
Bishop Matthews was installed as the eighth Bishop of Christchurch in 2008.
Previous to this she was the Bishop of Edmonton, Canada for 10 years
She said she is not retiring and not ill but simply following her saviour and seeing where she will go next.
The Most Reverend Philip Richardson will fill the role as acting bishop until a new bishop is elected.
Archbishop Richardson said he was deeply grateful for the courage and tenacity Bishop Matthews showed especially when leading Diocese through a very challenging period.