The 70-year-old spent spells as an assistant coach at various German clubs including Bayern Munich, Bayer Leverkusen, Schalke 04 and Hamburg.
Hermann only joined Dortmund this summer as part of manager Edin Terzic's coaching staff.
"Peter has asked us for his release for health reasons. It goes without saying that we have complied with his wish," Dortmund sporting director Sebastian Kehl said.
"We were incredibly happy last summer that Peter – although his personal life plans didn't include it at the time – decided to spend another year in professional football for BVB.
"In him we are not only losing an experienced, technically excellent coach, but also a great person."
Hermann added: "My time at BVB was short and yet very intense."
"I've come to appreciate this club, the team and the entire environment over the past few months.
"I've enjoyed working for a club that loves and lives football so much. Unfortunately, I'm not allowed to work longer for Dortmund, because of course health always comes first."
