Head coach Marco Rose has left Borussia Dortmund after just one year in charge, the Bundesliga runners-up said on Friday.
Borussia Dortmund and Rose "ended their collaboration" following an "intensive analysis of the season", the club said in a statement.
The team had "not gotten the most out of our potential in a number of areas", Dortmund CEO Hans-Joachim Watzke said.
Rose said he was still convinced by his plans for Dortmund, but saw that he did not have the "100 percent" backing of the club.
Dortmund finished second in the Bundesliga this season, trailing Bayern Munich by eight points.
The team was plagued by poor defending and conceded 52 goals in the Bundesliga, the most of all the clubs who finished in the top eight.
They struggled to pressure Bayern, who eased to their tenth consecutive title. Dortmund also failed to advance from their Champions League group also containing Ajax, Sporting and Besiktas.
Rose's side subsequently lost to eventual finalists Rangers in the knockout stages of UEFA's second competition, the Europa League.
The expectations were high for Rose, who joined Dortmund from Borussia Moenchengladbach last year.
Senior bosses would discuss their future coaching team internally "over the coming days", the club said.
However, both top-selling daily Bild and football magazine Kicker claim Edin Terzic, who was interim head coach last season, is favourite to replace Rose.
The 39-year-old is currently technical director at the club.