The 66-year-old has opted to vacate his post as general director of the Nerazzurri as he believes his shelf life at the club has expired after seven years at the clubInter with immediate effect in order to make way for ex-Juventus director Marco Fassone.
The 66-year-old was appointed by the Nerazzurri in the summer of 2005, but feels that after just over half a decade at the Giuseppe Meazza, his cycle has come to an end in northern Italy.
An open letter posted on the Inter website from Paolillo read: "Dear president, I have always thought that life, much like the economy, comes in cycles.
"That is why I would like to inform you that - following the upcoming conclusion of the final stages of the Youth Academy leagues - I consider my cycle at Inter to be at an end."
"It is from the bottom of my heart that I thank you, the entire Moratti family and everyone at the club for the constant support I have received during these fantastic years, as well as the opportunity you gave me to be a part of the success that Inter has had - at every level - over the course of this cycle.
"It has been an incredible, unique experience and I will not try to hide how emotional I am in taking this decision.
"Thank you again, and all the best to Marco Fassone who is about to begin a new cycle, part of a bright future here at Inter."
Fassone became the marketing director of Juventus in 2003 and was one of the original architects behind the development of Juventus Stadium. He has also been recognised for his work in expanding the club's brand overseas.
He then moved south six years later to take up the position of CEO at Napoli, before stepping down at the end of the 2011-12 season.