Kewell, who replaced compatriot Kevin Muscat last December, reached the Asian Champions League final in his first season at the helm but has battled in Japan's top flight.
Despite breaking a four-game losing run with a 4-1 victory over Kashima Antlers on Saturday, Yokohama (8-5-10) sit 12th, just seven points clear of the relegation zone and 20 points back from leaders Machida Zelvia.
The club confirmed Kewell's departure on Tuesday, with fellow Australian John Hutchinson taking the reins on an interim basis.
Harry Kewell waves to Marinos supporters after their AFC Champions League final first leg win. (AP PHOTO)
"We would like to announce that we have released manager Harry Kewell from his contract, effective July 15th, 2024," the club said in a statement, translated from Japanese, on Tuesday.
"Head coach John Hutchinson will take over as interim manager from today's training session."
Kewell's next step is unclear after yet another setback in his managerial career.
The 45-year-old former Liverpool and Leeds United star had four senior managerial appointments in England's lower divisions after hanging up his boots in 2014, with little success.
Kewell coached Watford's U23s from 2015-17, then landed his first head coaching role at Crawley Town in 2017.
The Australian was lured to Notts County in 2018 but was sacked after just 14 games.
In 2020, Kewell took over at Oldham Athletic but lasted less than a season before being dismissed in March 2021, with the club sitting 16th in League Two.
Then at Barnet, he was dismissed in September 2021 after failing to get a win in seven matches.
Kewell received a coaching lifeline when he joined Celtic as Ange Postecoglou's assistant in June 2022.
Harry Kewell and Ange Postecoglou during a media event for Celtic's trip to Sydney in 2022. (Dan Himbrechts/AAP PHOTOS)
He left the Scottish powerhouse when he was appointed as Marinos manager, becoming was the third consecutive Australian coach to lead the club after Postecoglou and Muscat.
Hutchinson, a capped international for Malta, enjoyed a long playing career in the NSL, then with the Central Coast Mariners in the A-League Men, before turning to coaching.
He predominantly worked in the United States, then joined Yokohama FC as an assistant in 2023 before becoming a member of Kewell's staff at Marinos this year.
It is unclear if the 44-year-old will contend for the full-time head coach role.
12°C