The former Rotherham United boss arrived at Elland Road in October on a deal until the end of the season.
While he guided the tumultuous West Yorkshire club to a comfortable mid-table finish in the Championship, it quickly became clear his deal would not be extended by controversial chairman Massimo Cellino.
The club has been carrying out a rather public search for a new head coach since the end of the season but finally revealed Evans would depart in a statement on Tuesday evening.
Cellino wrote: “I would like to thank Steve Evans for his efforts as the head coach of Leeds United.
"Steve completed the job he was brought in to carry out – to keep the team in the Championship - and his hard work here has been greatly appreciated.
"I wish him and Paul Raynor the very best for the future.
"We have, however, decided that a different approach is required in order to achieve our targets for the new season.
"The Club is now looking to appoint a new head coach to build on the good work of Steve and Paul and deliver the special season which our supporters deserve.”
Former Swansea City manager Garry Monk became the odds-on favourite for the Leeds role on Tuesday.
Moves for Bristol Rovers manager Darrell Clarke and MK Dons chief Karl Robinson have both been rejected.