David, who has an estimated net worth of $52 billion, will take on the title of director emeritus after his retirement.
Outside of Koch Industries, the brothers are deeply involved in philanthropy and politics, bolstering conservative organizations that include the Americans for Prosperity Foundation, Freedom Partners, and the Cato Institute.
Chairman of the board of Americans for Prosperity David Koch speaks at the Defending the American Dream summit at the Greater Columbus Convention Center in Columbus, Ohio, Aug. 21, 2015.
The announcement came just one day after the Koch-backed political network announced a multimillion dollar publicity campaign to Donald Trump's controversial tariffs on steel and aluminum. It is the second largest privately-held company in the United States.
"Unfortunately, these issues have not been resolved and his health has continued to deteriorate", Charles Koch wrote in the letter, a copy of which was obtained by The Washington Post. The Koch network has plans to spend up to $400 million on politics and policy initiatives during the 2018 midterm election cycle.
David was the Libertarian Party's vice presidential candidate for the 1980 presidential election. They won about 1% of the vote.
Baxter also said he had no doubt that the network will continue to thrive without David Koch. "We greatly appreciate his vital role on the board and all that he has done to help us build a strong foundation for our future success". The longtime philanthropist, who has supported vaunted NY institutions such as the American Museum of Natural History, the Metropolitan Museum of Art and the Lincoln Center, also funded a cancer research institute at MIT and has donated over $700 million to medical causes since his 1992 cancer diagnosis.
He's donated to museums - giving $35 million to the Smithsonian's Natural History Museum and $20 million to the American Museum of Natural History in NY. Koch officials said David Koch's donations and pledges to non-profit groups have topped $1.3 billion. Those gifts triggered some controversy.
Democrats have demonized the Koch brothers for their outsized influence in conservative politics over the last decade. The organization was especially active during the presidency of Barack Obama whom they both saw as driven by a socialist agenda that threated their libertarian philosophy and their business. He is not expected to give up his stake in Koch Industries at this time.
The Koch Brothers have made an indelible mark on their support for conservative causes, so much so that former Senate Majority Leader Harry Reid blasted Republicans as having a "Koch addiction".
He joined the family business in 1970.