Zille on Tuesday apologised for praising colonialism through her tweets three months ago, and for defending the tweets after she came under fire from her party and the public.
Maimane said Zille agreed that it was in the best interests of the party for her to vacate her position on all decision-making structures of the Democratic Alliance, including the federal executive, and the federal and provincial councils.
She would however remain provincial premier until 2019. He added that the long-drawn battle between Zille and the party leadership over the controversy had not been good for the party.
"This has not been an easy decision. The alternative was to become embroiled in a protracted legal battle in the lead up to the 2019 elections. I have no doubt that this would have done further damage to the project we have embarked upon, to the detriment of every South African committed to non-racialism and constitutionalism," said Maimane.
Zille is known for her fiery tweets and her unreserved tackling of her trolls and detractors on social media. She said although she would not be involved in party decision-making any longer, she would be on the ground campaigning for the DA.
"I will be working in by-elections and wearing my [DA] T-shirt. I also think it was a good idea for me to be removed because it is very hard for leadership to always be sitting chirping about things...it is hard."
Zille revealed that she had been contacted recently and advised to form her own political party but had refused. She would not say who contacted her with the suggestion.
Earlier, Zille apologised to South Africans over her tweets, adding that her actions undermined Maimane's party leadership.
"I realise the wounds of history that my tweet and subsequent defence of it has opened. In particular, I recognise that my actions were insensitive to South Africans who suffered under colonial oppression. For this, I am genuinely sorry," said Zille.
Zille added that everyone should get behind Maimane's leadership.
"During this period I made public utterances that had the effect of undermining the leader of the DA and the project he is leading. I greatly regret this...Mmusi Maimane is a democratically elected leader of the DA and we must all get behind him."
Last week, Maimane announced Zille's party membership had been suspended, but Zille was quick to point out that he had flouted the party's constitution by not giving her a chance to make representations.
The party later backtracked saying Zille was still to submit reasons why she should not be suspended.