The club announced in a statement today that the Italian's tenure at the club has come to an end.
A statement from the club read: "Chelsea Football Club today announced that Claudio Ranieri is to leave the club."
A Chelsea Football Club spokesperson said: "Claudio has done a first-class job for the club and paved the way for future success. We would like to wish Claudio all the best for the future. We are discussing the exact terms of his departure with him and his representatives."
Chelsea had been widely expected to dismiss Ranieri, who guided the club to the Champions League semi-finals and second in the Barclaycard Premiership, to make way for a new man.
Jose Mourinho, coach of Champions League winners Porto, has expressed an interest in the Stamford Bridge job.
Mourinho has long been favourite to succeed Ranieri, who has known for some time that he has been on the way out of the club.
