The team's president Steve Dean said Thursday the change is voluntary and will be officially announced Friday.
The team "understands that the current name is offensive to some, and thus divisive to our community," he said in a statement.
"We want to enable the players, volunteers and parents to keep focused on what we do best: provide excellent cheer and football programs from tackle to touch."
The decision comes weeks after an Ottawa musician, Ian Campeau of the band A Tribe Called Red, filed a human rights complaint alleging the name is racist.
Campeau hailed the news Thursday, posting a triumphant "WE DID IT!!!" on Twitter.
Others echoed the sentiment, tweeting their support and congratulations.
"Very glad to hear the Nepean Redskins will change its racist name & logo. Step in the right direction!" one wrote.
"About time!! Now other teams need to follow suit," tweeted another.
Not all were on board with the switch, with a few on social media accusing the team of giving into political correctness.
Dean said the club will choose a new name, logo and colours at the end of the football season in November. Parents, players and volunteers will be consulted, he said.
The full transformation is expected to cost more than $100,000 and "may take a number of years to complete," he said.
The Ottawa club isn't the only one facing criticism over the Redskins name.
A push to change the name of the National Football League's Washington Redskins has also gained momentum this year.Suggest a correction