The Rugby Park side confirmed on Tuesday morning that the Northern Irishman had left by mutual consent following days of media speculation.
Killie finished ninth in the Scottish Premier League but a club statement said Shiels' conduct off the pitch, as well as his side's results on it, had influenced the decision to part ways.
The 57-year-old was last week handed a four-match ban - two games of which were suspended - after he questioned the impartiality of the Scottish FA's judicial panel, claiming Celtic influenced disciplinary hearings.
Shiels had been banned for four matches less than six months earlier when he questioned the integrity of a fourth official who sent him to the stands, but he insisted he had only ever tried to protect the Ayrshire club.
"I'm heartbroken but that is football," Shiels said. "It's hard to take but I will just have to get on with it and try and get another job somewhere.
"I think I've left Kilmarnock in really good shape. We have got stability and I've built the foundations.
"But I feel that I've been the victim of falling in love with the football club.
"I tried to overprotect the club and that was my biggest weakness. I just want to apologise to the supporters for that.
"I treated the club like my family and I love my family. I loved the football club too. I didn't set out to harm the club but as I tried to protect it from what I felt where injustices, I became a victim of that."
Insisting he had no regrets, he added: "The chairman was good enough to give me the opportunity to manage the oldest club in Scotland and it was an honour to manage a fantastic club.
"It's been something I will treasure the rest of my life. I feel in love with it too much and that was my weakness.
"I want to thank Michael for the opportunity to manage the club because without that opportunity I wouldn't have had some great experiences."