Heaslip captained Ireland in the November tests in his Leinster team mate's absence through injury and although O'Driscoll has returned to the squad, Kidney said the time was right for a change of leader.
"Obviously he'd be very disappointed, Brian has always told you what an honour it is to captain Ireland and that will never change. He accepts my reasons for doing it," Kidney told a news conference.
"I don't think people realise sometimes the amount of weight that would be on a captain's shoulders and Brian's been hugely generous to the team and I just feel that now is the right time to allow him to concentrate on himself, to get himself right."
Heaslip said: “To lead your country is the ultimate in any sport. To get the opportunity again, considering what an inspirational leader Brian is and the other players who could have been chosen to captain the team is even more humbling."
The 33-year-old O'Driscoll, who captained Ireland for the first time in 2002, said he accepted the reasons behind the decision, knowing that the next rugby World Cup in 2015 was most likely "a bridge too far".
“The captaincy has been a big part of my career and life over the last number of years,” said Ireland’s record cap holder.
“While I was naturally very disappointed not to be leading the team in the Six Nations, when I talked it through with Declan I accepted the reasons behind the decision.”
FORWARDS: J Heaslip (capt), C Healy, M Ross, M Bent, T Court, D Kilcoyne, D Fitzpatrick, R Best, R Strauss, S Cronin, D Ryan, M McCarthy, D O’Callaghan, I Henderson, D Toner, L Stevenson, C Henry, P O’Mahony, S O’Brien,
BACKS: C Murray, I Boss, P Marshall, E Reddan, J Sexton, R O’Gara, P Jackson, I Madigan, B O’Driscoll, G D’Arcy, K Earls, L Fitzgerald, D Cave, S Zebo, A Trimble, C Gilroy, F McFadden, D McSharry, R Henshaw, R Kearney.