The manager will not be back for another season with the big-spending French club.
Monaco has confirmed that the club has parted company with coach Claudio Ranieri.
Ranieri took over the Principality club in May 2012, guiding it to promotion in his first season in charge.
Monaco spent heavily ahead of a return to Ligue 1, with the likes of Radamel Falcao, James Rodriguez and Joao Moutinho all making big-money moves to the Stade Louis II.
It did not take long for Monaco's new additions to gel and mount what looked to be a significant challenge to defending champion Paris Saint-Germain for the title.
SPORTING NEWS: Projected USA starters | Mexico XI
However, Falcao suffered a season-ending knee injury in January, and Monaco was unable to keep pace with PSG minus the services of the Colombian striker.
Monaco finished the season in second place, nine points adrift of PSG, securing a place in next season's UEFA Champions League.
Despite relative success, Ranieri's departure had been widely expected, although the Italian had always maintained his desire to remain with the club.
But the club has now made the decision to part with the 62-year-old, with vice-president Vadim Vasilyev stressing a desire to recruit a more attack-minded coach.
"I confirm the departure of Claudio Ranieri. We have decided to separate," Vasilyev said.
I would like to acknowledge that Claudio Ranieri has done a very good job.
"It was a difficult decision. It is never easy when the results are very good. But we believe that at this stage of the project we need a new dynamic. I cannot confirm the name of the new coach because there are still details to work out.
"We are looking for a coach who has an offensive vision and can make a good show for our fans."