The 48-year-old replaced Mark Hughes at bet365 Stadium in January but was unable to stop them dropping into the Championship, winning just two of his 15 league games in charge.
"Stoke City can confirm that Paul Lambert has today left his position as manager by mutual consent," the club said in a statement on Friday.
"The club would like to thank Paul for his work over the past four months and wish him well for the future. Whilst he was unable to guide us to Premier League safety after being appointed in January, it certainly wasn't due to a lack of effort, professionalism and dedication on his part.
"Paul would like to thank the Board, players and staff for the opportunity and their support. He would also like to thank the fans for their unwavering support. Whilst looking forward to his next challenge, he would like to wish the club every success next season.
"The club will appoint a replacement as soon as possible in order to give the new manager time to prepare for the challenge of the 2018-19 season in the Championship."
Lambert claimed this week that he felt he was not given enough time to save Stoke's top-flight status, although he insisted there is "a really good core" of players at the club.
The news comes just hours after Swansea City, who were also relegated, confirmed they would not be renewing the contract of head coach Carlos Carvalhal.