Wrexham: 10 managerial changes in Championship over summer
The Dutchman called for clarity on his future following their relegation at the beginning of May, but has had to wait with the club finally confirming his exit on Friday morning.
The delay is understood to have hinged around the start of a new accounting period, which begins on Monday.
With players due back in for pre-season training on June 30, the recruitment process for Van Nistelrooy's replacement is well under way.
A statement read: 'Leicester City Football Club and Ruud van Nistelrooy have mutually agreed that Ruud's contract with the club as first team manager will terminate with immediate effect.
'Ruud has overseen a challenging period for the club. From his appointment in November 2024, he approached the role with professionalism, integrity and a clear commitment to our aims, including through the integration of several promising players from the club's academy into our first team environment.
'Ruud moves on with the respect and thanks of everyone at the football club for his dedication and hard work, and with our very best wishes for the future.
'Preparation for the EFL Championship season will continue with the planned start of pre-season on Monday, June 30.
'First team coaching staff will oversee the delivery of those plans until a new manager is appointed.
'There will be no further comment until this process has been completed.'
Van Nistelrooy replaced Steve Cooper on November 29 and won four points in his opening two games.
But that was as good as it got, as a run of 15 defeats from their next 16 matches sealed their fate.
Within that run, they lost nine successive home games without scoring – a new top-flight record.
Once relegation was confirmed, the Foxes improved, taking seven points from their final five outings to finish 18th, 13 points from safety.
Van Nistelrooy called for talks with the club's hierarchy as soon as relegation was confirmed, but was left hanging for a number of weeks.
The Dutchman said: 'I would like to personally thank the Leicester City players, coaches, academy and all the staff I have worked with for their professionalism and dedication during my time at the club and to thank the fans for their support, and take this opportunity to wish the club well for the future.'
The Foxes face the prospect of having to deal with a significant points deduction in the Championship, having been charged by the Premier League for breaking Profit and Sustainability Rules (PSR).
Leicester begin their season with the visit of Sheffield Wednesday on August 10.
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