Ms Stewart has been with the organisation for a total of 27 years, of which 22 years have been in the chief executive role.
The search for her replacement is due to begin in the next few weeks.
Ms Stewart told Business News discussions had been underway with the state government and Lotterywest executives over the appropriate time for her to retire for months, and December appeared to be a good option.
Ms Stewart is also on the board of Save the Children Australia, which she said had been giving her great satisfaction, and she would be looking for opportunities to become involved with other non-governmental organisations going forward.
"I'm certainly wanting to keep busy," she said.
Ms Stewart was also looking to return some focus to her earlier profession as a social worker.
During her 22 years at the helm of Lotterywest Ms Stewart has seen the organisation tranform from one with revenue (from sales) of under $200 million to one expected to bring in around $820 million for the current financial year.
Her decision to leave the executive role has been met a message of thanks from chair of the Perth International Arts Festival Margaret Seares, who has worked closely with Ms Stewart.
“Jan has been a great supporter of Perth International Arts Festival for many years and we wish to express our deep appreciation to her for this support,” Professor Seares said.
“Jan has also provided us with great advice over the years and we will miss her around the table.
“Perth International Arts Festival adds its voice to the many in our community who wish her all the very best for the next phase of her life, in which we are sure she will continue to contribute to the community with the enthusiasm and commitment she has shown in her current role."