The Town have confirmed that Kerley has parted ways with the club with assistant manager Padraig Moran due to take over as interim coach
Athlone Town currently occupy fifth place in the Airtricity First Division with 22 points and have endured a poor run of form in recent weeks.
A statement on the club's official website read: "Athlone Town FC can confirm that Padraig Moran will assume First Team responsibility for the remainder of the season following the departure of Mike Kerley.
"All at Athlone Town would like to thank Mike for his contribution to the club over recent years and wish him best of luck in the future.
"We call on all supporters of the club to rally around Padraig as he takes control of the first team ahead of Longford Town’s visit to Lissywoollen this Friday, August 31."