In a statement on its website, the federation cited “non-football related topics” as “wearing out” both Terim and the TFF.
Terim returned to coaching the national side, his third spell in charge, in 2013. However, he has failed to achieve the same success of his second tenure, when Turkey reached the semi-finals of Euro 2008.
“Recently, several non-football related topics that occupied media coverage has come to a state of wearing out Turkish Football Director Fatih Terim and the Turkish Football Federation,” the statement said.
“Parting ways is the healthier way for both sides.
“We would like to thank our valuable manager for his services to Turkish football, who proved himself in Turkey and in the world with his success and wish him good luck for the rest of his life.”
Fatih Terim first became Turkish manager in 1993. Terim managed to take the national team to Euro '96, but the team was eliminated in the group stage without scoring a single goal in three matches.
Terim then managed Galatasaray between 1996 and 2000. He won the UEFA Cup (ex-Europa League) in 2000.
Terim's second spell with the Turkish national team occurred between 2005 and 2009. Turkey not only qualified for the Euro 2008, but finished the tournament in third place.
Under Terim, Turkey won 68 matches, drew 32 times and lost 32.