“We thank Thomas Tuchel and his training staff for their successful work at BVB,” said the club, adding that the “cause of the separation is by no means a disagreement between two people”.
Relations between Tuchel and chief executive Hans-Joachim Watzke have become publicly strained since a bomb attack on the Dortmund team bus on April 11.
Three explosive devices hidden in a hedge went off next to the team bus as it left the squad’s hotel heading for a Champions League quarter-final match at home against Monaco, wounding Spanish international Marc Bartra, 26, and a motorcycle police officer.
Tuchel had complained that neither he nor his shell-shocked players were consulted on the decision to go ahead with the match against Monaco less than 24 hours after the attack.
But Watzke denied that was the case and said the claim had annoyed him.
In a statement, the club sought to play down the row, saying that “the well-being of the Borussia Dortmund club… is always more important than individuals or possible differences between them”.
It added that it would not go into details about the reason for the separation.
With a year left on his contract, Tuchel’s departure reportedly includes a separation payment of around 2.5 million euros ($2.7m).
His exit came just three days after Dortmund won the German Cup in Saturday’s final against Eintracht Frankfurt.
It was Tuchel’s first title in his two years in charge.
He has been shown the despite finishing third this season in Germany’s top tier to qualify for the Champions League.
“I am very grateful for two beautiful, eventful and exciting years. Too bad that it won’t go on,” he wrote on his official Twitter account.
“Thanks to the fans, the team, the staff and everyone who has supported us.
“I wish BVB all the best. TT.”
According to German daily Bild, Tuesday’s meeting to decide Tuchel’s future lasted just 21 minutes when he was told his fate by Watzke and sports director Michael Zorc at the team hotel.
For weeks, Lucien Favre, currently in charge of French league side Nice, has been tipped to take over due to his Bundesliga experience with Hertha Berlin and Borussia Moenchengladbach.
Tuchel’s relationship with the club has been in decline since the start of the year.
The coach claimed to have been left in the dark when Zorc signed Norwegian teenager Alexander Isak in January.
Things took a turn for the worst last month after Tuchel’s claims he was not consulted when the Champions League home quarter-final was played 24 hours after the bomb attacks.
Not so, said Watzke, in an interview and it seemed a matter of time before Tuchel’s departure was confirmed.
Tuchel also appearanced to lose the support of his dressing room last weekend when captain Marcel Schmelzer criticised his decision not to select Nuri Sahin to replace injured Germany midfielder Julian Weigl in the cup final team.