Neville’s contract was supposed to expire in July and current Netherlands women’s manager Sarina WIegman has already been tasked with taking over the Three Lionesses’ job from September.
Neville was appointed as manager of the Three Lionesses in January 2018, replacing Mark Sampson, and guided them to the SheBelieves Cup before finishing fourth at the 2019 FIFA Women’s World Cup in France.
England’s performances have declined since the tournament in France and they failed to defend the SheBelieves Cup last March.
Neville was set to lead the Lionesses into this summer’s UEFA Women’s Championship but the tournament was rescheduled to 2022 after the Coronavirus pandemic wreaked the footballing calendar.
The FA will now make an interim appointment to take Team Great Britain into this summer’s Olympic Games following Neville’s exit.
In a statement, Neville said: "It has been an honour to manage England and I have enjoyed three of the best years of my career with The FA and the Lionesses.
"The players who wear the England shirt are some of the most talented and dedicated athletes I have ever had the privilege to work with. They have challenged me and improved me as a coach, and I am very grateful to them for the fantastic memories we have shared.
"I'd like to thank The FA for the tremendous backing they have given me, in particular Sue Campbell and my talented support staff whose energy, commitment and enthusiasm has been crucial to helping us make the progress we have.
"I wish England Women every success in the future and look forward to following their journey in the years to come."
