Hm. That's a tough one. My old piano teacher had to go to hospital for a number of months, and that's how I ended up with my new one. It was kind of convenient for me, even though it meant my old teacher was ill, and I still go visit her and stuff and let her know how I'm going. So we managed to part on good terms.
Your teacher might perhaps know of his/her teaching limitations. In retrospect, I think my old teacher knew and even hinted a bit that I needed to get a new teacher.
I don't know how to introduce the subject, but I'm sure there's a nice way to do it. Does your current teacher have any advanced students? If not, then it should be kind of easy to explain it's time to move on but you definitely want to keep in touch with your progress and ask for advice.
Good luck! You really should do it though if you know you have to move on.