Harry Cobden, who rode a Grade One winner for Nicholls at the recent Grand National Festival at Aintree, will take over in the top job at the stable, with Bryony Frost also potentially set for a more prominent role.
Nicholls told the Racing Post: "Harry will become our number one as Sam is going freelance. I expect Sam to have as many rides and winners for me over the next 12 months as he did during the last season.
"Harry has been with us since the age of 16. A lot of my owners have wanted to use him. We’ve lots of good jockeys here, such as Harry, Bryony Frost and Sean Bowen and it’s hard to keep everybody happy.
"Sam can ride for everyone now. There has been no falling out. We’re still all mates, it’s just a restructuring on both sides."
Twiston Davies remains a part of the plans at Ditcheat but is happy to have opted to go it alone in his pursuit of becoming champion jockey.
He said: "It’s my decision to go freelance and now that I’ve made it I am going to give it everything I’ve got. I’m not going to be number one to Paul any more, but he’s still going to give me plenty of rides.
"I’ve been massively lucky in my career to date. I’m still relatively young and I still want to progress.
"There are lots of other jockeys getting rides with Paul and I feel I’ll be better placed to take the next forward step by operating as a freelance jockey. From the outside I’m sure it will be viewed as a bit of an eye-opening decision, but I’m happy with it and am determined to get the new season off to a flyer.
"Dad and Dr [Richard] Newland will continue to support me as they have done for many years. I’ve the utmost faith that my agent Chris Broad will be able to get me more outside rides now.
"I’ve got the best of both worlds, really. Things won’t be that different – I’ll still be riding plenty for Paul, but not as number one."