Saint-Etienne had started the season well and he leaves them lying in sixth place in Ligue 1, three spots higher than where they finished last term.
The 5-0 humiliation by bitter rivals Lyon on November 5 saw the pressure increase, but his decision to depart still comes as a surprise.
Garcia, a Barcelona youth product in his playing days, asked to not receive any financial compensation, according to the club.
Julien Sable will take charge of the first team in the meantime, with the former club captain previously serving as their academy director.
Next up for Les Verts is a trip to second-bottom Lille on Friday.