The Irish coach managed to guide the Seagulls to Premier League safety once again, but the club has decided to make a change after a disappointing overall campaign.
Assistant manager Paul Trollope and first-team coach Paul Nevin have also left the Amex Stadium, with a summer of major change at the club now afoot.
Brighton released an official statement from chairman Tony Bloom on their website, which reads : "Chris has done an excellent job over the past four and a half years. First stabilising our club, reaching the play-offs in his first full season, securing our first ever promotion to the Premier League, and retaining our status in two successive seasons.
“Undoubtedly, this has been one of the most difficult decisions I have had to make as chairman of Brighton & Hove Albion, but ultimately one I have made due to how we struggled in the second half of the season.
“Our run of three wins from 23 Premier League matches put our status at significant risk. It is with that in mind, and the performances during that period, that I now feel it’s the right time for a change.
“Chris will always be very fondly remembered by Albion staff and fans as one of our club’s finest and most-respected managers.
“I would like to wish Chris, Paul and Paul – who have all worked extremely hard throughout their time here – every success for the future, and thank them on behalf of everyone at the club.
“They will always be welcome at the Amex, and will be remembered here with great affection.”
Brighton's search for Hughton's successor is already underway and the club has declined to add any further comment.
The veteran head coach led the Seagulls to automatic promotion from the Championship in 2017 and guided the club to 15th in the Premier League the following year.
Despite a promising first half of the 2018-19 campaign, Brighton only won two league matches in 2019, slipping into a basement battle with Cardiff City.
Hughton's side finished 17th in the final standings, two points ahead of the Bluebirds, but four worse off than the previous season.