No, you don't have to reinstall.
I would leave the Steam program itself on your main drive, and instead move the games to your external drive.
Use link shell extensions to create a symbolic lynk from your OS drive to your external drive:
http://schinagl.priv.at/nt/hardlinkshellext/hardlinkshellext.html
It's simple to do.
After installing the above program, go to your new drive and create a "Games" folder.
Now go to your steam folder in your OS drive (programs/steam). There will be a folder called "steamapps". Move that folder (cut and paste) into your "Games" folder in the new drive.
Right click on the new steamapps folder in your "games" folder you just moved and select: "Select as source".
Now go back to your Os drive and into your programs/steam folder. Right click some empty space and choose: "Drop as" -> "symbolic Link".
That's it. to the OS it will look like the folder in your new external drive actually exists in the old main drive. This way, any new games you download will also reside in the new drive.
I use this myself since I run a smallish SSD as my main drive, so all my games live on a secondary 2 TB drive, but my Steam folder itself lives on the SSD. This way Steam loads up super quick, and my games don't take up space on my SSD.
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