Tottenham manager Harry Redknapp will leave the club after nearly four years in charge at White Hart Lane.
In a statement published early Thursday, Spurs Chairman Daniel Levy said the decision to ax Redknapp was not taken lightly.
"Harry arrived at the club at a time when his experience and approach was exactly what was needed," he said.
"This decision in no way detracts from the excellent work Harry has done during his time with the club and I should like to thank him for his achievements and contribution. Harry will always be welcome at the Lane."
Speculation about Redknapp's future has been building steadily since the end of the season, with reports suggesting that relationships have become strained over contract negotiations, Sky Sports reported.
The 65-year-old's current deal expires next summer and he has previously made it clear he would like to be offered a longer agreement.
Redknapp has also stressed in the past he has no problem with Levy, and dismissed claims earlier this week he had resigned.
But while he had wanted to remain at Spurs, it is thought they have now decided to part ways following a meeting between Levy and Redknapp on Wednesday.
In the statement issued by the club, Redknapp said he was proud of his achievements at the club.
"I have had a fantastic four years with the club, at times the football has been breathtaking. I am sad to be leaving but wish to thank the players, staff and fans for their terrific support during my time there."
Tottenham had occupied a position in the top three for much of the campaign, but faded badly after the turn of the year.
The slump in form coincided with stories linking Redknapp to the England job after Fabio Capello's departure, although the Spurs manager did not think it was a factor, Sky Sports reported.
Roy Hodgson was surprisingly named as Capello's successor ahead of Redknapp and the focus is now set to turn to who will come in at White Hart Lane.
Everton boss David Moyes has been installed as the early favorite to take the reins at Tottenham next season.