The decision comes after Terim was allegedly involved in a brawl with a restaurant owner in a Aegean coastal resort town.
Turkey national football team coach Fatih Terim has resigned from his job.
The decision comes two weeks after he was allegedly involved in a brawl in a west-coast holiday town, the Turkish Football Federation (TFF) said in a statement on Wednesday.
The 63-year-old former Fiorentina, AC Milan and Galatasaray boss was seen in television footage fighting with a restaurant owner in the Aegean coast resort town of Alacati.
Turkish media said he and his two sons-in-law left five men injured after the incident.
"Some non-football issues have been wearing out our football director Fatih Terim and the management of Turkish football federation," TFF said on Wednesday.
"The two sides agreed that it would be more healthy for both parties to part ways," it added.