Mr Maddock has held the role of leader at the County Council since the Conservatives won the 2009 local election.
He announced his intention to seek the Conservative Party nomination to stand as Police and Crime Commissioner for Avon and Somerset today.
Successful candidates will stand in a regional election due to be held in November.
Mr Maddock said: “Deciding to stand down as Somerset County Council leader has been a really hard decision, a real wrench.
“But the new Police role is hugely important and influential. With my experience in commerce, in public service, and my contacts in local, regional and national politics, I feel I have a lot to offer.”
Mr Maddock’s intention to resign will bring about a leadership election within the Conservative group of councillors and a successor will be approved through a vote at the Council’s annual meeting in May – Mr Maddock will then formally step down.
He will continue to represent his Mendip South ward as an elected council member.
He added: “I will do everything I can to ensure a smooth transition as I hand over.
“I have worked through some of the toughest financial times in several generations and am proud of the work we have done and the achievements we have delivered within those extremely difficult budget challenges.”
Reacting to the news, Liberal Democrat group leader Cllr Sam Crabb said Mr Maddock's time in office would be remembered for the 'appalling' Southwest One fiasco and cuts to frontline services.
He said: "He tried to blame Southwest One for failing to deliver savings but he was the one who should have been getting the savings through.
"I'd be astonished if the Conservatives picked him as their candidate for Police Commissioner given his record at the County Council and Mendip District Council."
The PCC post is new and according to the Home Office website the remit will be “to cut crime and deliver an effective and efficient police service within each force area”.
The Home Office states that PCCs will not be expected to run the police. Instead the successful candidate in Avon and Somerset’s role is to represent residents across the region and to hold the Police to account.