Gianfranco Zola has resigned as manager of Sky Bet Championship club Watford.
The Italian said in a statement on the club's website that he had made taken the decision "in the best interests of the team".
His exit comes with Watford - who, under Zola, lost last season's play-off final to Crystal Palace - on a run of nine matches without a win in the second tier following Saturday's 1-0 home defeat to struggling Sheffield Wednesday.
Zola leaves the Hertfordshire club 13th in the table, eight points adrift of the top six.
The early betting in Sky Bet's next Watford manager market sees Ian Holloway as the 8/1 favourite.
Steve Clarke follows at 9/1.
Sky Bet's Dale Tempest said: "Punters don't seem to be taking Ian Holloway's hiatus claims too seriously as he's always a popular choice when a job comes up at Championship level.
"His promotion record speaks for itself so it wouldn't be a surprise if he is indeed on Watford's shortlist, but second favourite Steve Clarke (9/1) will surely be interested in having another crack at management."
In an open letter to the club's supporters on the official website, Zola wrote: "First of all, this decision has not been made quickly. I mentioned after the game on Saturday that I wanted to think about things overnight and that is exactly what I have done.
"I must place Watford Football Club first in my thoughts and it is for this reason that I have taken my action.
"I feel that it is in the best interests of the team that somebody new is given the chance to bring the success which we have all hoped for and worked very hard for.
"It is for a variety of reasons, and not just over one matter or one moment, that I feel this is the right decision for me, in the best interests of the club - and I know I can trust you, the supporters, to respect my decision fully."
In a club statement, Watford's board stressed it was with "great sadness" and "full respect" that they accepted Zola's decision and spoke of their sincere gratitude to him for his achievements at Vicarage Road.
Former Italy international Zola, following a glittering playing career with the likes of Napoli, Parma and Chelsea, enjoyed a two-year spell in charge of West Ham between 2008 and 2010 before being sacked and replaced by Avram Grant.
He was brought to Watford by the club's new Italian owners, the Pozzo family, in July 2012.
Having competed for automatic promotion to the Barclays Premier League in his first season at the helm last term, the Hornets eventually finished third.
They went on to beat Leicester in a thrilling play-off semi-final before losing out to Palace at Wembley. But, with expectations of another promotion charge this year, Zola's side have failed to replicate the achievements of last season and currently sit in the bottom half of the Championship table.
In his open letter to fans, Zola added: "Last season was such an amazing time, for the players, the staff and the supporters. And I loved that journey. Every minute of it brought a new challenge, different experiences and a lot of learning.
"I have had supporters tell me that the Leicester game in May was the most amazing moment in their time supporting their club.
"I will always remember having been welcomed so warmly to this wonderful football club, to have been supported so fully and to have been able to share moments of excitement and joy that will always live with me.
"But this game does not wait and does not stop. There is always the next challenge and a new environment ahead which means nothing is ever the same.
"For now, I want to wish the players, the staff, the fans and everyone else who has Watford Football Club at heart my best wishes for the future.
"It has been a privilege and a pleasure to serve this club and I am sure we will see each other again one day."