Johannesburg-born Conway, who has played 20 Tests, 32 ODIs and 50 Twenty20s since qualifying for New Zealand in 2020, will be available for all nine Black Caps Tests and next year's Champions Trophy, New Zealand Cricket (NZC) said.
"The decision to move away from a central playing contract isn't one I've taken lightly, but I believe it is the best for me and my family at this present time," the 33-year-old said in a news release.
"Playing for the Black Caps is still the pinnacle for me and I'm hugely passionate about representing New Zealand and winning games of international cricket."
Conway follows his former captain Kane Williamson, who will also play in SA20, in being granted a casual contract as NZC look to keep their best talent for most of the season in the face of lucrative offers from Twenty20 leagues.
"In the current environment it's important to have flexibility in our system to navigate some of the challenges posed by franchise cricket," said Scott Weenink, NZC chief executive.
Conway and Williamson have been included in the 15-man squad for a one-off Test against Afghanistan and a two-match series in Sri Lanka in September.
Another Black Caps opener, Finn Allen, has joined fellow internationals Lockie Ferguson and Adam Milne in turning down a central contract and will be available for selection on a match-by-match basis.
Two as yet undetermined players will be granted central contracts to replace Conway and Allen, NZC said.
