The Yellow Submarines have started the new campaign with three defeats and one win from four games to sit 15th on the table heading into the international break.
Setien arrived at the Estadio de la Ceramica in October last year as a replacement for Unai Emery, who had left for Aston Villa.
The former Barcelona and Real Betis manager guided Villarreal to fifth on the table at the end of the season.
But their only win this term has come against Real Mallorca punctuated by defeats to Real Betis, Barcelona and Cadiz.
A club statement read: “Villarreal CF has announced that the head coach of the first team, Quique Setién, is leaving the club. The club highlights his great professionalism and commitment and appreciates both him and his coaching staff for having taken charge in a complicated situation last season. Under the coach from Cantabria, the team had a great season, promoting many youngsters from the youth academy and qualifying for the UEFA Europa League after reaching fifth place in LaLiga.
“Villarreal CF would like to thank Setién for his work and involvement and wishes him the best of luck in his career.
“The club’s director of football, Miguel Ángel Tena, will take over on an interim basis and will lead tomorrow’s session scheduled for 6.30pm CEST at the José Manuel Llaneza Training Ground.”
Villarreal will resume their La Liga campaign against Almeria after the international break.
