Reports have long linked Lee with a move away from Anfield, following the appointment of Steve Clarke following Kenny Dalglish’s return as manager last season.
A statement on their official website read: “Liverpool FC confirmed today that assistant manager Sammy Lee has left the club by mutual consent.”
The statement added: “The club will continue to analyse the requirements of their backroom team and will make further announcements in due course.”
Dalglish said: “We’d like to place on record our thanks for all of Sammy’s hard work over the years and the contribution he has made to Liverpool.
“He has always been a credit to the football club and a credit to himself. Everyone at Liverpool FC wishes him all the best in his future career.”
Lee said: “I returned to the club in 2008 and I’m proud of the contribution I’ve been able to make since then. I want to wish Kenny, the players and the supporters all the best going forward.”