This comes after the Buccaneers were beaten 3-0 by SuperSport United in a league match which was played at the Mbombela Stadium in midweek.
The Serbian tactician took the blame for the embarrassing defeat which was Pirates' second successive loss of the 2019/20 campaign, including the 2-1 Caf Champions League defeat to Green Eagles in Lusaka last weekend.
Bucs released the following statement regarding Sredojevic's resignation on Friday night:
"Milutin Sredojević relinquishes his position as head coach of Orlando Pirates football club after two seasons at the helm."
"The club would like to place on record that this decision was taken unilaterally, and it was the management’s decision to accept Mr. Sredojevic's [decision] to vacate his position based on reasons he has presented which are of personal nature."
"Rulani Mokwena assumes the coaching responsibilities assisted by Fadlu Davids and Franck Plaine."
Sredojevic was in his second stint as Pirates coach having coached the team between 2006 and 2007.
The Soweto giants improved gradually under the guidance of the well-travelled tactician following his return to the club in August 2017.
Sredojevic guided the team to a second-place finish in the league during the 2017/18 campaign and as a result, Bucs qualified for the Caf Champions League for the first time since 2013.
Last season, Bucs narrowly lost the PSL title to Sundowns on the final day of the campaign.
He also led the Houghton-based side to the 2018 Telkom Knockout Cup final where they were stunned by Baroka FC.
Sredojevic has been linked with a possible move to Zamalek although he previously vowed to honour his contract with Pirates.