The Swede's departure, by mutual consent, brings to an end weeks of speculation over his future.

"I have enjoyed my time at Manchester City very much indeed and in particular, I would like to thank the fans, players and staff for their amazing support over the season," Eriksson told www.mcfc.co.uk.

"I wish the club - and everyone associated with it - much success in the coming years."

City owner Thaksin Shinawatra was reportedly unhappy with the former England coach's performance over the second half of the season, as his team slid out of contention for European qualification via their league placing.

That they eventually did make the UEFA Cup, albeit through the Fair Play League, was not enough to save Eriksson - who is thought to have been lined up as the next manager of the Mexican national team.

Eriksson's departure had been inevitable for a couple of months.

The Swede demanded talks over his future following the season-ending 8-1 hammering at Middlesbrough, but Dr Thaksin responded only by saying he was undergoing a thorough review of the season, leaving Eriksson to take charge of a two-match tour of the Far East.

City chief executive Alistair Mackintosh said: "The board of directors and all at Manchester City would like to thank Sven for his efforts and contributions throughout the season. We wish him all the best for the future. Sven remains a friend of the club."

Reports on Monday morning claimed City have made an official approach to Blackburn in an attempt to bring in Mark Hughes as Eriksson's replacement.