Bagwell took over as hitting coach at the All-Star break when Sean Berry was let go and helped the Astros to a second-half surge behind a recharged offense. He was offered a two-year contract to return in 2011. He had served as special assistant to the general manager since his retirement following the 2005 season.
"We talked about the responsibilities of the job and the time and energy it takes, and it was more than he had anticipated when he took the job," Wade said. "We talked about staying in the organization in a capacity similar to the one he had before he took the job as hitting coach.
"We're disappointed. We'd love to have him back, but we understand his position."
Bagwell, the club's all-time leader in homers and RBIs, said he needed time to talk about the decision with his family.
"This was a very difficult decision for me," Bagwell said in a statement released by the team. "I enjoyed my time as hitting coach a great deal. The players were great and I can't think of a better coaching staff to work with. They were outstanding.
"At this point in time, I'm unable to commit to a full season of putting in the time that is necessary to be effective in that role. But, I do look forward to continuing to work with the Astros."
Wade said that he and manager Brad Mills will work together and put together a short list of potential candidates immediately.
Brian McTaggart is a reporter for MLB.com. This story was not subject to the approval of Major League Baseball or its clubs.