Fiji Rugby on Wednesday said they had reached an agreement with the Australian to "part ways, effective immediately."
According to the sport's national body, the decision followed discussions on the future direction of the national men's squad.
"Mick has been fully committed to his role and remains dedicated to the players and staff," Fiji Rugby chief executive Koli Sewabu said in a statement.
"Out of respect for the team and to ensure the program can continue to the new direction that Fiji Rugby has set for the future, Mick and Fiji Rugby agreed to part ways so FRU can move forward."
Sewabu paid tribute to Byrne's contribution to rugby in Fiji.
Under his guidance, from the Fijian Drua to the Flying Fijians, we have seen growth, resilience and a commitment to the jersey that will serve us well moving forward," he said.
"These are not simply moments in a season, but pillars for our future success."
Byrne, who has coaching experience in seven countries, spent five years working with Fijian teams, first with the Fijian Drua Super Rugby team, then with the national men's team.
He also played VFL for more than a decade with Melbourne, Hawthorn and Sydney before turning his hand to coaching.
He spent time with Scotland and New Zealand as a skills coach, before joining Michael Chieka's Wallabies staff ahead of his move to Fiji.
"I have been overwhelmed by the support of the world's best Fiji fans during my five-year involvement," he said.
"Their warmth and welcome have meant a great deal to me. I remain fully committed to the game and wish Fiji Rugby every success moving forward."
Fiji Rugby said it will soon announce interim coaching arrangements and begin the process of appointing a new head coach.
The Fiji team is due to play in rugby's first Nations Champion in July.
Fiji have decided to play all of their matches in the northern hemisphere, against Wales in Cardiff on July 4, England in Liverpool on July 11, and Scotland in Edinburgh on July 18.
Fiji are in Pool C at next year's Rugby World Cup in Australia.
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