The decision underscores a growing divide between the outspoken tech industry conservative and Silicon Valley.
Thiel has also considered resigning from the Facebook board, sources familiar with his thinking said, according to the Journal. His motivation reportedly stems from a perception of the valley's intolerance for right-leaning politics as well as concerns around the financial impacts of regulatory scrutiny on the tech industry.
The billionaire investor is expected to stay on the board in the near term, while investment firms Thiel Capital and Thiel Foundation will relocate to Los Angeles later this year, according to the report.
Thiel's representatives did not respond to CNBC's request for comment.