Vice President Robert Baillie will take over as Chairman until he is inaugurated as President at the Scottish Conference in March next year.
Mr Paton announced his decision to step down at the Scottish Council meeting in Perth this week.
He said: “This was not a decision I took lightly but due to a change in personal circumstances I felt I could no longer devote my time to the organisation.
“I have met many new friends from all over the country and I hope I have left a good impression with the work I have achieved. I wish my colleagues every success for the future.”
New chairman Robert Baillie said: “Robert Paton has made a huge contribution to the NFRN both at branch and district level. We are sorry to see him go but wish him well.”
Mr Paton took over as President in March this year.
