The manager left the club after remaining in charge for two years.
He had taken the charge of the club after Jurgen Klopp's departure in 2015.
Interestingly, the announcement ha been made just days after Dortmund beat Eintracht Frankfurt to win the German Cup on Saturday.
Speaking on the major announcement, the club said in a statement posted on its website: "Eight-time German champions Borussia Dortmund and coach Thomas Tuchel are parting company with immediate effect. This is the result of a conversation between Chief Executive Officer Hans-Joachim Watzke, Sporting Director Michael Zorc, Thomas Tuchel and his advisor Olaf Meinking, which took place on Tuesday."
"As an employer, Borussia Dortmund will not comment in detail on the reasons behind the separation, which is the result of a longer process and is supported by all the club committees. For the good of all parties involved, we ask for understanding for our wish that no conclusions be drawn on the basis of rumours or without any background information," the club said.
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