The Foxes had been in discussions with Holloway over his future after the club were relegated to Coca-Cola League One earlier this month.

But chairman Milan Mandaric has revealed the two parties had opted to go their own ways and said: "This has been a very difficult story for all parties but, after taking stock and holding several constructive meetings, we have agreed that the time is now right."

He added: "I could not fault either his commitment or effort to the cause but the last few weeks have been the most disappointing during my tenure within the club.

"That's why ultimately we both felt it would be in the best interests of Leicester City and its long-term future if we amicably parted company now.

"My energies will now be fully focused on getting the right man, firstly to stop the decline we have suffered in the last few years, and secondly, to take us forward in the future with that level of stability which we all crave."

Holloway had been at the helm at the Walkers Stadium since November but managed just nine wins in the 32 games he was in charge.

They were ultimately relegated on the final day of the season after a goalless draw with promoted Stoke.

The former Queens Park Rangers boss commented on the club's website: "Leicester City is a marvellous club and I am as devastated as anybody that this great club suffered relegation.

"I gave 100% to the cause but unfortunately we ran out of time. The fans here are a different class and deserve a lot, lot better. I'd like to wish everyone connected with Leicester City well for the future - the club will always remain close to my heart."