Roberto De Zerbi will leave Brighton after the Seagulls' final game of the season against Manchester United on Sunday.
Brighton clarify the surprising news on Saturday, revealing that the club and the Italian coach had mutually agreed to part company.
De Zerbi enjoyed great success in his first season with Brighton, guiding the club to Europe for the first time in their history after he took over from Graham Potter, who had left to join Chelsea.
Brighton had a strong start to 2023-24, but a series of injuries to key players left them depleted and, though they made it through their Europa League group, which also included heavyweights Ajax and Marseille, they were subsequently knocked out by Roma.
Their form in the Premier League has also dropped off, with Brighton managing just four wins since the turn of the year, and ahead of Sunday's meeting with Manchester United, the highest they can finish is 10th.
In fact, across their first nineteen (19) Premier League matches this season, Brighton were the fifth-highest scorers in the Premier League (38 goals) and had a conversion rate of 13.3 per cent.
However, in their last eighteen(18) games since the turn of the year, only Everton (15) have scored fewer goals than the Seagulls (17), with their conversion rate of 6.6 per cent the worst of any side in this time.
De Zerbi was linked with taking over at Liverpool following Jurgen Klopp's departure, but the Reds have instead turned to Feyenoord's Arne Slot.
Brighton chairman Tony Bloom said: "Roberto has given us two excellent seasons of service in which he has led the club to new heights, not least our first ever European campaign which will live long in the memory of Albion fans.
"We have mutually agreed to end Roberto’s contract at a time that suits both parties allowing us the earliest opportunity to plan for next season, and Roberto plenty of time to consider his next move and his future.
"I am sure our fans will give Roberto and his staff a wonderful and fully deserved send-off. In the meantime, I'd like to thank Roberto and his staff for all their hard work in the past two seasons. They all leave our club on good terms and with our very best wishes for the future."
De Zerbi said: "I am very sad to be leaving Brighton, but I am very proud of what my players and staff have achieved with the support of everyone at the club and our amazing fans in the past two historical seasons.
"We have agreed to end my time at Brighton so that the club and I can continue to work in the way that suits each of us best, following our own ideas and visions, as well as our work and human values.
"I have really enjoyed an intense and challenging two years working in the Premier League, not least competing in four major competitions this season. Leaving now provides me with time to take a break before deciding on my future plans."