Bellamy has to restrict the number of games he plays due to ongoing knee problems and has already informed new Wales boss Gary Speed.
"I've made Gary aware of my decision," Bellamy told reporters after Cardiff's 2-0 victory over Coventry.
"I'm not going to be able to play every game for Wales so I feel it would be best to give the armband to someone who will be there for every game. I feel, with the young squad we have, it would be best.
"Being captain for Wales was great. It's a huge honour. I will get right behind the next person who does it. I've always said I'll never retire but I have to be clever about which games I play and which games I can't."
Bellamy, on loan from Manchester City, added: "I'm not going to be able to play every game, it's not going to be possible. I said this to John Toshack, it's no secret. Being captain is a great honour but it isn't the reason I turn up for Wales or not. Putting on that Welsh jersey has always meant as much to me."
Source: PA
Source: PA