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The key word that is being stressed by his compatriots is that this is temporary, indicating that this is likely more of an extended break from competitive play, allowing for him to spend time with his wife, who is widely speculated to be pregnant as well. The expectation then is that xiao8 will return after some time to defend his title with NewBee, although it may allow for the rest of NewBee to keep playing with a replacement in his absence. The wording however is ambiguous enough that the Great Director may intend to only return in a different role, potentially as a coach for his team, although this would contradict his assertions after the TI4 finals that NewBee would be unlikely to have any immediate changes to it's roster.
Prior to being approached by the owner of NewBee to become the centerpiece of this new "Dream Team", xiao8 was widely known to be considering retirement, having lived through LGD's downturn around TI3 and seeming himself less motivated than in the past, due to his problems with his future wife in the lead-up to TI3. The strains of maintaining a marriage alongside the traditional Chinese practice regime have been up for discussion recently, with Zhang 'LaNm' Zhicheng naming it as a big part of his reason for retiring.
xiao8's story may have largely been overshadowed this year by the hopes of many fans to see Team DK's Xu 'BurNIng' Zhilei and Chai 'Mushi' Yee Fung achieve their dreams before retirement, but whatever the future may hold (and again it almost assuredly holds more of xiao8 in one form or another), it should be at least a great relief for many fans of the Director to know that he achieved the highest accolades already.
Zhang 'xiao8' Ning's statement taken from his weibo:
"Even though I am reluctant, I have still decided to temporarily leave this stage. I am very lucky, I have accomplished my dream. I am very thankful for every teammate and opponent that has grown alongside me, along with the fans that have supported me all along. Because of all of you, my life has been more exciting."
Sources: Photos by Valve and ACE. Statement from xiao8's weibo and translated by Josh Lee.