"On the basis of a lack of chemistry between the squad and the coach and a lack of confidence, the club's directors do not see any possibility for further co-operation," the club said in a brief statement on its website.
The 51-year-old coach, whose side are also competing in the Europa League this season, had been with the club since 2010 and was under contract until 2015.
For the last three seasons, he has guided AZ into European competition and won the Dutch Cup earlier this year.
AZ beat PSV 2-1 at home on Saturday to move to 13 points from their opening eight matches of the league season. They next play PAOK Salonika of Greece at home in the Europa League on Thursday.