The 62-year-old has left his position following reports he struck 19-year-old Remi Streete following Monday's Under-21s fixture against rivals SunderlandNewcastle United reserve team manager amid reports that he hit one of his players.
The Premier League club released a short statement on Thursday to confirm that the 62-year-old had left his position.
"Newcastle United can confirm that Willie Donachie has resigned from his position as reserve team manager with immediate effect," the statement read. "The club will be making no further comment."
There were widespread reports earlier on Thursday that Donachie had been suspended after a player, thought to be 19-year-old Remi Streete, alleged that he had been punched by the Scot following Monday's Under-21s fixture against Sunderland.
Newcastle have endured an eventful week, with director of football Joe Kinnear having stood down on Monday.
The news was largely welcomed by fans of the club, but manager Alan Pardew expressed his regret at Kinnear's departure.
"I'm just sad to see anybody lose their job, as Joe has. He did a lot of good work here," the 52-year-old said.
"But that decision was the board's decision and we have to now work towards getting us and our position in the league more secure.
"My job is actually the next game and that's what I'm focusing on."