Tigers finished eighth in the Australian's first season with the club, only ahead of Gloucester and Newcastle, and 11 points adrift of a play-off spot.
"The decision has been mutually agreed following extensive discussions regarding the club's future direction," said a Leicester statement on Saturday.
"The club has commenced the process for finding a new head coach to lead the men's programme into the 20224/25 season.
"We thank Dan for his contribution to Leicester Tigers."
Former Australia and Argentina head coach Michael Cheika is already being linked with the job.
