كتب : Hatem Maher
Leonardo's Milan adventure lasted for one season, which was not successful for the Rossoneri.
"We mutually announce that we are parting," Leonardo, who took over at Milan at the end of last season following the departure of Carlo Ancelotti, told a news conference.
"It was a mutual choice made in a calm way. Our paths are separating but friendship and respect remain."
The seven-time European champions are yet to settle on his replacement, according to the club's chief executive Adriano Galliani.
"Milan have not contacted anyone, there is time. It's not a decision to take in a few days, we will take much longer," he said.
A third-place finish in the Serie A and a Champions League exit from the round of 16 cut short Leonard's Milan spell.
Milan were also knocked out of the Italian Cup after losing to Udinese in the quarter finals. Their arch-rivals Inter eventually won the competition.