Ranieri took over in 2012 and led the club to promotion from Ligue 2 in his first season with the big-spending Ligue 1 side.
This season Monaco qualified for the Champions League after finishing second, nine points behind champions Paris Saint-Germain.
"I can confirm that Ranieri will leave Monaco,” Vasilyev told reporters at a press conference. “I want to thank Claudio for doing a great job here.
“It was a difficult decision. It is never easy to take a club from Ligue 2 to the Champions League. But we believe that at this stage we need a new dynamic.”
Vasilyev added that Ranieri’s replacement will play more attacking football however he was reluctant to discuss further details on the successor.
"I can't confirm the name of the new coach as we are still negotiating some details. We want someone who can bring an offensive way of play which will be enjoyed by our fans."