Marco Rose leaves Dortmund after a disappointing year in charge. AFP
Borussia Dortmund and Rose "ended their collaboration" following an "intensive analysis of the season", the club said in a statement.
The team had "not gotten the most out of our potential in a number of areas", Dortmund CEO Hans-Joachim Watzke said.
Rose said he was still convinced by his plans for Dortmund, but saw that he did not have the "100 percent" backing of the club.
Dortmund finished second in the Bundesliga in the 2021-2022 season, trailing Bayern Munich by eight points.
Dortmund struggled to pressure Bayern, who eased to their tenth consecutive title. They also failed to advance from their Champions League group stage where they met Ajax, Sporting and Besiktas.
Rose's side subsequently lost to eventual finalists Rangers in the knockout stages of UEFA's second competition, the Europa League.
The expectations were high for Rose, who joined Dortmund from Borussia Moenchengladbach last year.
The team would discuss their future coaching team internally "over the coming days", the club said.
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