Jesse Marsch has left the New York Red Bulls "to pursue other opportunities" amid reports he is close to a role with sister club RB Leipzig.
The MLS club confirmed Marsch's exit on Friday but did not reveal his future plans. Chris Armas has been promoted to head coach in Marsch's place.
Reports over recent weeks had linked Marsch with moving to Germany to take over as coach of RB Leipzig, but the Bundesliga club last month announced that Hoffenheim's Julian Nagelsmann will be the coach from the 2019-20 season.
That leaves the upcoming season still unaccounted for, and The Athletic reported on Thursday that Marsch was in "deep discussions" to join Leipzig, either as an interim coach or as an assistant to sporting director Ralf Rangnick.
Both clubs are owned by the Austrain energy drink company Red Bull.
Marsch has long pursued the chance the coach in Europe and left the team briefly in the 2017 preseason and again last summer to work towards his UEFA Pro License.
"We are fully supportive of Jesse and his decision to pursue a new opportunity," Red Bulls sporting director Denis Hamlett said in a statement. "Jesse played a large role in establishing our club identity, but the culture here is the result of the dedication and hard work of many."
Marsch leaves New York in the midst of a successful season, as the Red Bulls are in second place in the Eastern Conference with 32 points having won 10 of their 16 games.
He led the club to the Supporters' Shield for best regular-season record in his first season in charge in 2015 and finished top of the Eastern Conference the next season, though he found success in the playoffs difficult to come by.
Armas has been an assistant with the Red Bulls since 2015. His only previous head coaching role was with the Adelphi University women's team.
The 45-year-old is a former U.S. international who made 66 appearances for the national team and was named U.S. Soccer's Male Athlete of the Year in 2000. He spent 10 of his 12 MLS seasons with the Chicago Fire, winning the MLS Cup and U.S. Open Cup double in 1998 as a teammate of Marsch.
"We are confident in Chris Armas," Hamlett said. "We know Chris and the coaching staff will have our team ready to compete each week, and they will continue to find ways to improve and work towards our ultimate goal of winning MLS Cup."
Marsch's departure means both New York MLS clubs will have new coaches for Sunday's derby, as it will be the third game in charge of New York City FC for Domenec Torrent, who replaced Patrick Vieira last month.