Julen Lopetegui resigned as Wolves coach just days before the start of the Premier League season, citing dissatisfaction with the club's recruitment process.
"Wolves and Julen Lopetegui have reached an agreement to part ways, ending the Spaniard's nine-month reign as head coach at the club," Wolves announced on Tuesday.
"The head coach and the club acknowledged and accepted their differences of opinion on certain issues and agreed that an amicable end to his contract was the best solution for all parties."
Former Bournemouth manager Gary O'Neil fired this summer after leading the Cherries to Premier League survival, is said to be in a position to succeed Lopetegui.
Did you read this?
Former Spain and Real Madrid manager Lopetegui took over as manager of Wolves in November, replacing Bruno Lage, with the team bottom of the Premier League, and helped them stay there, ending 13th.
However, the 56-year-old is claimed to be dissatisfied with their transfer policy, with many first-team players leaving this summer and few replacements found.
Wolves have sold players such as Ruben Neves, Conor Coady, Nathan Collins, and Raul Jimenez and have only signed two free agents, Matt Doherty and Tom King.
The club's statement added: "Talks have been ongoing in recent weeks, held with the utmost respect and cordiality, affording the club time and space to begin work on finding a successor, while also ensuring that Julen and his backroom staff could continue their planned preparation to ensure the playing squad would be in the best possible condition for the start of the Premier League season."
In his statement, Lopetegui said: "I wish Wolves and everybody at the club the best of luck for the future, and thank them for the opportunity granted at the time to take charge of this beautiful club.
"It has been an honour to enjoy this adventure. Also, of course, I want to thank the players, who have always given the maximum to achieve our objectives, and especially the fans that made me feel like one of them from the very first moment and have always been amazing to me, my staff and my family."
