Moody was credited with helping manager Malky Mackay bring Steven Caulker and Chilean midfielder Gary Medel to the club over the summer.
But he was placed on 'gardening leave' earlier in the week, with 23-year-old Apsalyamov controversially taking over his role, and Moody's departure has now been ratified.
Apsalyamov, a family friend of the club's Malaysian owners who had until recently been helping paint the ground as part of a work experience placement, was a surprise choice for such a senior role.
But Cardiff's owner Vincent Tan, who previously angered fans by changing the club's home colours from blue to red, has insisted on removing Moody from his post despite the furore it has caused.
"Cardiff City Football Club can announce the departure of Head of Recruitment, Iain Moody. Iain is leaving the club with our thanks for his contribution," read a statement on the club's official website.
"In the interim period, Alisher Apsalyamov has been appointed as Acting Head of Recruitment, focusing on gathering data on individual players. Ultimate recruitment decisions of course remain the domain of the manager and majority shareholder.
"Tan Sri Vincent Tan, the board and the staff at the club are fully committed to the future success of the team and hold a strong desire to compete in the best league in the world."
Tan himself urged supporters to remain firmly behind the club and reiterated his backing for Mackay.
"I have every faith in Malky and his team to lead us through the challenges of the Premier League. I have supported him in the past and will do so in the future for many years to come," said Tan.
"I would say to all Cardiff City fans and everyone connected to the club, let us look forward to the future and remain united in our support of the team."
Cardiff City Fans Rejoice! Place your faith in Vincent Tan. He is a forward-thinking innovative owner. Who else would recognise that the way to win trophies is to get a work-experience guy in to paint your stadium and hire your next generation of top, top, players?- gutbukkit