David Toms will replace Sutton on the nine-member board.
Sutton was named U.S. captain for the 2004 Ryder Cup and said it will take up much of his time and energy over the next 17 months.
'I don't feel I can do justice to that responsibility and also commit the time necessary to effectively represent the tour and the players as a member of the policy board,' he said. 'I also want to devote as much time as possible to my family and my golf game.'
Sutton has not won since the 2001 Houston Open. He tied for third last week at the MCI Heritage, his best finish in two years.
Sutton was serving his second term on the policy board, which includes four PGA Tour players, four businessmen and the PGA of America president.
Toms was chairman of the Players Advisory Council and was next in line to join the policy board. Toms will be replaced by Scott McCarron as chairman of the PAC.
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