Sheldon joined the Publicis-owned agency in 2005 as digital director. He was given his new role in November 2006, as part of the agency's move to boost investment in its digital operations.
His responsibilities will be taken over by existing members of the digital team, led by the head of operations Steve Parker.
Sheldon ran his own digital consultancy for more than two years before joining Starcom. Before that, he was a managing partner at MindShare.
Sheldon said: "I joined Starcom to lead its digital strategy, build specialist areas and improve the level of integration at the agency. Much of that has been achieved and I feel the time is right to pursue my own venture."