Hasenhuettl guided Leipzig to sixth in the Bundesliga table and the club had been hoping he would stay until his contract expired next summer.
However, the 50-year-old could not agree terms with Leipzig and they will be looking for a new manager ahead of the 2018/19 season.
Hasenhuettl took charge of Leipzig back in 2016 but he has decided to move on after failing to secure a longer deal.
Confirming his departure, Leipzig said in a statement: ‘He did not want to go into the upcoming season without an extension to his current contract. Therefore, both parties mutually agreed to end the cooperation after two very successful years.’
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