The 54-year-old had been in the job just 12 months having been appointed following the retirement of John Gorman after the Milton Keynes club's defeat to Huddersfield in the League One play-off semi-finals in May 2012.
He helped the Dons embark on a run to the FA Cup fifth round last season which included an historic meeting with AFC Wimbledon, victory over Sheffield Wednesday and a 4-0 thrashing of QPR at Loftus Road, but the league campaign was disappointing as the Dons finished four points shy of the play-off places.
A statement on mkdons.com said: "Following discussions with the chairman, Mick Harford has this morning (Tuesday) left his role as assistant manager at Milton Keynes Dons.
"The 54-year-old joined the Dons in May 2012 after spending time working in recruitment and scouting for the Football Association. Mick spent 12 months working alongside Karl Robinson in League 1.
"Mick has today (Tuesday) confirmed his departure and will now seek a new challenge away from MK Dons.
"The club would like to place on record it's thanks to Mick for all of his work over the last 12 months and wishes him the best of luck with his future endeavours."
Harford had spells with 11 clubs as a player including Birmingham, Luton, Derby, Chelsea and Wimbledon.
His managerial career has taken in stints at Nottingham Forest, Rotherham, QPR and Luton.
Dons boss Karl Robinson alluded to Harford's future in March when at a fans forum he said he admired the way that the then-Manchester United manager Sir Alex Ferguson regularly changed his assistant to keep the backroom staff fresh.