Broncos CEO Dave Donaghy has confirmed the exit of the South Sydney 2014 premiership winner and former Broncos forward.
The 39-year-old had signed a contract extension until the end of 2028 after last year's grand final win.
News Corp reported Maguire and Te'o had a disagreement over defensive tactics in Melbourne prior to Brisbane's 18-14 comeback win on Friday night.
Ironically it was Teo's methodology on scrambling defence, so integral to the 2025 title triumph, that played a key role in the victory after the Broncos repelled wave after wave of Storm attacks.
Maguire, football boss Troy Thomson and Te'o held a crisis meeting on Monday night.
Te'o is yet to speak on what the exact reasons for his impending exit were.
Donaghy said it was natural for "strong, robust conversations" to be held within an NRL club and the Broncos were no different.
"Ben and I sat down yesterday and had a long conversation and it was respectful. I don't want to go into specifics out of respect for Ben," he said.
"We are disappointed we have reached a situation where he has tendered his resignation.
"I was very surprised I was having the conversation. We all were. Ben felt really strongly about what he was feeling and wanted to take a step outside the arena and we should respect that.
"I know for a fact Madge (Maguire) is pained by it because he deeply cares for his people and has a long relationship with Ben."
Donaghy said Te'o's contribution to the title win last year was "exceptional" and there were "internal and external" options to replace him.
When asked whether Maguire was difficult to work with, Donaghy said the coach had done the job he had been signed to do and had the entire organisation working in an upward trajectory, as evidenced by the 2025 premiership win.
Brisbane players Ben Talty and Brendan Piakura faced the media on Tuesday morning after news of the Te'o fallout broke.
Talty, a late blooming prop,' said Te'o was "a fantastic coach".
"He is our defence coach and we try to pride ourselves on our defence as a team," he said.
Second-rower Piakura has gone ahead leaps and bounds under Te'o with his defensive clout a highlight of his game. Te'o, also a feared back-rower in his day, had taken the powerhouse forward under his wing.
"He's done really well for me, just learning off him," Piakura said.
"He was a great player and a great coach as well. We won a grand final with him. He's our defence coach and us players really took his practices into the game."
Te'o's exit is a great loss for the Broncos who have made a name for themselves under his tutelage as a side that defends at their best in the big moments.
They conceded just 10 points in the second halves of the three finals they won last year, including keeping two clean sheets in the second 40 minutes against Penrith and Melbourne in the preliminary final and grand final.
Te'o was integral to the Rabbitohs' win in the 2014 decider under Maguire after playing one of best games of his career in the preliminary final against the Sydney Roosters.
The Broncos host the Dolphins on Friday night in the 'Battle of Brisbane' with prop Payne Haas (AC joint) to miss the clash.
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