"The new captain will be Mahela Jayawardene, who will lead the team in next month's Champions League T20."
Team mentor TA Sekar said Sehwag wants to focus solely on his batting.
"Viru told us a few months ago that he wanted to bat freely and suggested that we make Mahela the captain," he said.
This is not the first time that Sehwag has stepped down from the post to concentrate on his batting. He had earlier quit the position in 2010 and at that time Gautam Gambhir, who is now with Kolkata Knight Riders, replaced him.
Delhi Daredevils are placed in Group A of the tournament along with Kolkata Knight Riders, Perth Scorchers, Titans and a qualifier. Their opening match is against 2012 IPL champions, KKR.
Group B consists of Chennai Super Kings, Mumbai Indians, Sydney Sixers, Highveld Lions and a qualifier.
The two for each group qualifiers will be from among Trinidad and Tobago, Sialkot Stallions, Uva Next, Yorkshire, Hampshire and Auckland Aces.