Handler has chosen to end the weekly talk show after two series so she can work to "become a more knowledgeable and engaged citizen".
The 42-year-old comedian shared the announced on Twitter, writing:
"Like so many across the country, the past presidential election and the countless events that have unfolded since have galvanized me. From the national level down to the grassroots, it's clear our decisions at the ballot box next year will mark a defining moment for our nation."
Handler will continue her relationship with Netflix by producing a documentary together that will focus on people of different ethnicities, religions and political stances.
New episodes of Chelsea will be released weekly until the end of 2017.