Ruben Selles to leave relegated Southampton at end of season
The Spaniard, 39, was appointed until the end of the campaign in February following the sacking of Nathan Jones but was unable to save them from the drop after 11 seasons in the top flight.
Southampton, with just one game remaining this season, are bottom of the Premier League with just 24 points from 37 matches.
"Southampton Football Club can confirm that it has held conversations with men's first team manager Ruben Selles and decided that his contract will not be renewed when it expires at the end of the season," the club said in a statement.
"The club wants to place on record its thanks to Ruben for taking on the managerial position at a difficult time for the club and for giving his all as we attempted to stay in the Premier League."
Reports on Wednesday said Southampton were close to appointing Swansea boss Russell Martin as their new manager.