Christoph Daum left as Eintracht Frankfurt coach on Monday after the club's relegation on the final day of the Bundesliga season.
Frankfurt was relegated for the fourth time in its history after losing 3-1 at champion Borussia Dortmund on Saturday.
"After a long talk with (Frankfurt chairman) Heribert Bruchhagen and careful consideration, we came to the decision that I clear the way for Eintracht Frankfurt to tackle promotion with a new coach," Daum said.
Daum had been appointed until the end of the season, with both sides hoping to extend that arrangement.
There was no mention of a successor, with Frankfurt seeking an experienced coach to secure an immediate return to the Bundesliga.
"The first decision to be made now is the one of who will be the new coach," Bruchhagen said after Saturday's demotion.
Daum said an immediate promotion for Frankfurt "won't happen automatically" and will require changes be made.
"I've said some things very clearly internally. Eintracht now has the chance to take corrective measures," he said.
Bruchhagen was due to meet with the board later Monday in a crisis meeting to plan for next season.
The 57-year-old Daum was hired after Michael Skibbe was fired with seven rounds of the season remaining. He failed to win a game _ drawing three _ for the worst start by a Bundesliga coach.
Daum won the Bundesliga with Stuttgart in 1992, as well as titles in Turkey with Besiktas and Fenerbahce. He also had two spells in charge of Cologne, securing promotion for the club in his second stint.
An admission of cocaine use cost Daum the chance of becoming Germany coach in 2000 and forced his removal from Bayer Leverkusen.