The German giants reached the Champions League final last season, losing to Real Madrid.
However, they had a poor Bundesliga campaign and have parted ways with their coach.
A statement from Dortmund on Thursday read: “Borussia Dortmund and coach Edin Terzic are going their separate ways.
“The 41-year-old, who won the DFB Cup with BVB in 2021, finished runner-up in 2023 and reached the Champions League final in 2024, asked BVB to terminate his contract immediately. Borussia Dortmund agreed to the request after a joint discussion.”
In a message to supporters, Terzic said: “Dear Borussia fans, even though it is really hurting me right now, I would like to tell you that I will be leaving BVB today. It was a huge honour to be able to lead this great club to a DFB Cup victory and most recently to a Champions League final.
“I asked those responsible for a meeting after our final at Wembley because after ten years at BVB, including five years on the coaching team and two and a half years as head coach,
“I feel that the upcoming new start should be accompanied by a new man on the sidelines. Everyone who knows me knows that during this decision-making process of the past few weeks, two hearts have been beating in my chest.
“But even after intensive discussions, my basic feeling has not changed. I always wish Borussia Dortmund only the very best and don't say goodbye, but see you again. Hey, BVB!”