"Abdullah Avci is leaving the national team after reciprocal talks and an agreement was reached. We thank Mr Avci for his services," the federation said on its website.
Turkey are struggling to reach the 2014 World Cup finals in Brazil and stand fourth in Group D with seven points from six matches, adrift of leaders Netherlands (18) and second-placed Hungary (11), who are currently in the play-off spot.
The 50-year-old Avci, who took charge in November 2011, has been criticised by fans and the media for Turkey's poor qualifying results which include a home defeat by Romania.
"Just like winning and losing, parting ways is also a part of football. I consider that quitting my post is the right decision," Avci was quoted as saying in a statement reported by the Hurriyet Daily News website.
In an interview with the Dogan News Agency, TFF chairman Yildirim Demiroren declined to comment on media speculation that Fatih Terim, who has coached Turkey three times and is currently manager of Istanbul club Galatasaray, would take over.