The announcement comes shortly after club head coach Abdeslam Ouaddou had refuted reports of rift between himself and Ncikazi at the press conference ahead of Friday's CAF Champions League second-leg preliminary round clash against African Stars.
According to the statement on the club's website, the decision comes following talks with management on Thursday morning where the former Maritzburg United and Golden Arrows coach revealed his desire to lead another PSL team.
"Mandla leaves with our gratitude and our blessing," read chairman Dr Irvin Khoza's statement.
"His contribution to Orlando Pirates has been evident throughout his time with us. We respect his wish to pursue this new opportunity and wish him success as he takes on a new responsibility."
Ncikazi won nine trophies as part of the Buccaneers technical team serving under coaches Josef Zinnbauer, Jose Riveiro and Ouaddou.
It is unclear which new club the 57-year-old will be coaching after former club Golden Arrows dismissed rumours of a reunion.
Orlando Pirates breezed into the CAF Champions League group stage after a dominant 4-0 victory over Namibian side African Stars at the Orlando Stadium to secure a 5-0 aggregate victory.
AmaZulu and Sekhukhune United are among the favourites to progress ahead of the upcoming four Carling Knockout Cup Round of 16 fixtures this weekend.
African Stars head coach Gerald Guther says his side will "leave everything on the field," in their crucial CAF Champions League qualifier with Orlando Pirates on Friday night.
Golden Arrows have officially announced that Mandla Ncikazi has rejoined the club as head coach after parting ways with Pitso Dladla on Thursday evening.
