The former Liverpool boss has been in talks with the St James' Park outfit for months regarding a fresh deal but no breakthrough has been forthcoming.
He leaves having spent three full seasons with the club in which he oversaw their promotion back to the Premier League and re-established them as a top-flight club.
It is with disappointment that we announce manager Rafael Benítez will leave Newcastle United upon the expiry of his contract on 30th June 2019.— Newcastle United FC (@NUFC) June 24, 2019
Full club statement: https://t.co/IscVOvLxGD #NUFC pic.twitter.com/DWeBkpRubP
A statement on the club's website read: "It is with disappointment that we announce manager Rafael Benítez will leave Newcastle United upon the expiry of his contract on 30th June 2019.
"We have worked hard to extend Rafa’s contract over a significant period of time, however it has not been - and will not be - possible to reach an agreement with Rafa and his representatives.
"Rafa’s coaching staff, Paco de Míguel Moreno, Antonio Gómez Pérez and Mikel Antia, will also leave the club on 30th June.
"We would like to thank Rafa and his coaching team for their efforts over the last three years and their significant contribution to what has been collectively achieved.
"We would also like to thank our supporters, players and staff for their patience during a period of uncertainty.
"The process to appoint a successor will now begin."
The Magpies had hoped to come to an agreement with their manager before his contract had expired, but it is believed Benitez failed to agree fresh terms with owner Mike Ashley.
The 59-year-old has been linked with a move to manage Chinese Super League side Dalian Yifang, while Newcastle have been linked with a host of names for their new boss, with the favourite believed to be Garry Monk, who was sacked by Birmingham earlier this month.
Burnley manager Sean Dyche has also been named as a potential replacement for Benitez, with former Newcastle man Chris Hughton also reportedly in the running.
Newcastle are currently subject of takeover interest from Sheikh Khaled and the Bin Zayed Group, but fans had been hopeful of keeping Benitez at the club regardless of the current situation with the owners.
Both Jose Mourinho and Arsene Wenger had been mooted as replacements for the vacant job should the takeover transpire.