Spalletti joined Roma for a second time as coach in January 2016 after a first stint between 2005-2009 during which time the club won two Coppa Italia and one Supercoppa.
This season, Roma bagged a club record of 87 points in finishing second in Serie A, behind Juventus. But they crashed out of the Italian Cup semi-finals at the hands of cross-city rivals Lazio and lost the Europa League round of 16, 5-4 on aggregate, to Lyon.
Roma president Jim Pallotta said: “We would like to place on record our sincere thanks to Luciano Spalletti for all of his hard work and the significant contribution he has made to the club since his return.
“Under his stewardship this season, the team has won more Serie A points and scored more goals than any side in Roma’s history. We wish Luciano all the best for the future.
“This club is on a constant path of growth and that will continue with the appointment of a new coach who shares our values and philosophy and who will continue to help us take AS Roma forward.”
Italian media reports that Spalletti could be named coach of Inter Milan, while Eusebio Di Francesco, former Roma player and current Sassuolo coach, is the name doing the rounds as the likely incomer in the Italian capital.