Frazier currently co-leads FLAG’s U.S. venture capital program, which is expected to begin raising its ninth fund-of-funds later this year. She will be succeeded in that role by Peter Denious, who had been leading international activities (including the integration of Asia-focused Squadron Capital, which FLAG bought in late 2012).

Flag investors were informed of the move last night via letter, although many already were aware of her intentions. From the letter:

Diana Frazier, our co-founder, has decided that the time is right to retire from her management duties at the firm. Diana will serve as a Senior Advisor to the FLAG Venture Capital funds while she transitions her LP Advisory Board seats to ongoing members of the team over the next year. Diana has made the decision to step back from full time portfolio management ahead of the launch of FLAG’s next series of funds. During a multi-faceted and successful investment career, she has played a major role not only at FLAG, but throughout the industry. A veteran direct investor in the venture industry, Diana helped architect FLAG’s successful venture capital fund investing program that blends both renowned and select emerging managers in its portfolios. She is currently the only limited partner representative to serve on the Board of Directors of the National Venture Capital Association.

The transition of a founder is an important milestone for any enduring firm, and one for which FLAG is well prepared. Diana and co-founder Peter Lawrence recognized from the outset the need for FLAG to grow and thrive beyond their own tenure, and over the past five years have worked with their partners to establish firm governance and management responsibilities that span several generations of leadership at FLAG. As it has since 2008, the firm will continue to be run by our Management Committee, comprised of today’s equity partners (Peter Lawrence, Louis Sciarretta, Peter Denious, Jim Gasperoni and Scott Reed). Similarly, investment decisions will continue to be made by the firm’s multi-generational Investment Committee.

Frazier tells Fortune in an interview that she is “past retirement age,” and that she wants to be able to spend more time with her family.

“I’ve been wanting for years not to feel guilty about taking a three-day weekend, but I do,” Frazier explains. “It’s not my partners who make me feel that way, it’s me. I really love the venture industry, but I’d also like to be able to do some other things.”

Prior to co-founding FLAG with Peter Lawrence in 1994, Frazier led a family office for a tech executive and, before that, served as president of BancBoston Ventures.

Flag’s last venture fund-of-funds was capped at $180 million. Its current portfolio includes LP stakes in funds managed by such firms as Accel Partners, Andreessen Horowitz, First Round Capital, Redpoint Ventures, Spark Capital and Union Square Ventures.

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