AUCKLAND (AFP) - All Blacks coach Steve Hansen announced on Friday (Dec 14) that he will retire after next year's World Cup in Japan, saying the world champions needed some "fresh thinking".

"I think it's right for the team to have someone new after the World Cup, some fresh eyes, some fresh thinking," he told reporters.

Hansen took over in late 2011 after working as Graham Henry's assistant for seven years and guided the All Blacks to World Cup victory in 2015.

The team has had a mortgage on rugby's No. 1 ranking under his stewardship, never relinquishing the top spot.

With Hansen in charge, the All Blacks have posted 85 Test victories, eight losses and three draws, a win rate of almost 90 per cent.

"His record is unsurpassed... whatever happens next in Steve's career, his place as a New Zealand rugby legend is guaranteed," New Zealand Rugby chairman Brent Impey said.

Hansen's departure will start a scramble for his position, with his assistant Ian Foster and Ireland coach Joe Schmidt considered the frontrunners to replace him.

"I've got opinions but for once in my life I'll keep those opinions to myself because I don't think it's helpful for the process," Hansen said when asked about a successor.

However, he did let slip that Foster "would be a great head coach - he's developed as a coach and as a man and has some great qualities and his understanding of the game is great".

During his tenure, Hansen has displayed a keen eye for talent and instilled a team ethos of constant improvement.

It paid off after 2015, when a string of legendary players including Richie McCaw, Dan Carter, Ma'a Nonu and Conrad Smith retired but the All Blacks' success continued with barely a ripple.

He had originally intended to step down in 2017, mid-way through the World Cup cycle, but New Zealand Rugby persuaded him to extend his contract until 2019.

He was adamant this time the decision to retire was final.

"What's next? I don't know. So don't bother asking," he said, adding that his priority was to guide the All Blacks to a third straight World Cup in Japan.

Hansen said it would be the fifth World Cup he has attended with the All Blacks and he was still excited at the challenge posed by what will be his final campaign in charge of the team.

"It's probably going to be the toughest World Cup from a competitive point of view," he said.

"The northern hemisphere have really come to the party since the last one and got themselves in good nick. I think Australia and South Africa are capable of winning it of they get their stuff sorted."

A former policeman, Hansen coached domestically with Canterbury and was an assistant at Super Rugby level before moving to Wales in 2001 to work under Henry.

He took over the top job in Cardiff in 2002 but had mixed results before returning to New Zealand two years later to again work as Henry's offsider, this time with the All Blacks.