The 'Fashion Police' star - who replaced Taylor Momsen as the ambassador of the brand earlier this year - is upset she has to leave but is looking forward to helping Madonna and her 15-year-old daughter Lourdes choose a new girl.
Kelly said: "I'm sad, but I'm really excited to help pick the next girl and that I got to be a part of this process."
Lourdes added: "Kelly was at every audition. I was only at one and I did the online stuff. It was difficult because we only get photos and resumes."
Kelly says it was inspiring seeing all the girls audition in New York and knows whoever wins the contract is extremely lucky.
She told People magazine: "They get on stage in the middle of Macy's on a microphone in front of the mall. It's really intimidating - really scary. But it gave me faith in the female kind again seeing these awesome young girls on stage spilling their guts. One girl drove 20 hours!
"I can't even tell you what it's done for my confidence. To be a face of a fashion line? I'm not even a model citizen."
Kelly will officially hand over to the next girl in February but is hoping to still be involved with the brand.
She said: "I am going to the first photo shoot with the girls."
Lourdes added: "Of course she'll be involved. We're pallies. We're pals."