The church transferred its History Division to BYU in 1982, bringing the era of open LDS Church Archives to a close. Working in a new BYU division, the Joseph Fielding Smith Institute for Church History, brought Arrington into a more static situation, as he no longer divided his time between Church Headquarters and BYU. In February 1982, he was privately released as Church Historian and director of the History Division. These positions were assumed by Durham, who said that moving the team would save them from the increasing hostility from the Twelve Apostles. At the April 1982 General Conference, the change was not formally announced and Arrington did not receive the traditional vote of thanks for his service.
In March 1982, Arrington's wife Grace died. Arrington married Harriet Horne, granddaughter of Alice Merrill Horne, in November 1983. Arrington continued on as director of the Joseph Fielding Smith Institute for Church History until 1986 and he retired in 1987. In 2005, the Institute was closed and the department's historians were returned to LDS Church Headquarters.
Arrington remained an active and devoted member of the LDS Church throughout his life. In 1982, his wife Grace Fort died, and in 1983 Arrington was remarried to Harriett Ann Horne. On February 11, 1999 at the age of 81, Arrington died of heart failure at his home in Salt Lake City.