“It was decided that it would be better for both sides to part ways,” the Turkish Football Federation (TFF) said. TFF president Yildirim Demiroren said the separation was by “mutual agreement”.
The TFF said in a statement on its website that the federation and Terim had been worn out by media reports of “non-football” incidents.
The resignation comes after images on social media earlier this month showed Terim allegedly taking part in a fight at a kebab house neighbouring his son-in-law’s restaurant in the Aegean province of Izmir.
Local media reported the dispute related to business rivalry and Terim defended his actions, saying: “I had gone to solve the issue, not to fight.”
Five men were injured during the alleged brawl which involved two of his sons-in-law and two security guards, Turkish media reported.
The 63-year-old is a significant figure in Turkish football and has been the national team’s coach since August 2013, his third stint in charge of the national side.
Previous spells were in 1993 and 2005.
Terim, a talented central defender, played for the Turkish national team for 10 years from 1975-1985.
He managed top Istanbul team Galatasaray from 1996-2000, winning the league four years in succession, and guided them to victory over Arsenal in the 2000 UEFA Cup final.
Former Fiorentina and AC Milan boss Terim has been consistently linked to a return to Galatasaray amid the team’s current struggles.
Youth and Sports Minister Osman Askin Bak said Turkish football would “continue on its way”, quoted by the state-run Anadolu news agency.
Last month, Turkey captain Arda Turan announced his retirement from international football, hours after being kicked out of a training camp by Terim for allegedly verbally and physically abusing a journalist.
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