Terzic departs after leading his side to the Champions League final, which it lost 2-0 to Real Madrid at Wembley earlier this month. 

The 41 year-old, who was in his second spell in charge of Dortmund, asked Die Schwarzgelben to terminate his contract, which was due to expire next year.

"Even though it really hurts, I want to inform you that I will leave BVB today. It was a huge honour to lead this club to a DFB Cup final and recently a Champions League final," Terzic said in a club statement.

"After our final at Wembley, I asked the club bosses for a talk, because I've been at BVB for over 10 years now, with five as a coach and two-and-a-half as head coach, and I have the feeling that our new beginning should also come with someone new on the touchline.

"After intense discussions, my feeling hasn't changed. I wish Borussia Dortmund all the best. It's not goodbye, but till next time."

The German had previously been interim boss for seven months in the 2020-2021 season, guiding Dortmund to their fifth DFB-Pokal title. 

Terzić oversaw 96 competitive fixtures during his two seasons at the helm, having stepped into the role on a permanent basis before the 2022-23 campaign, winning 55 matches and averaging 1.93 points per game.