Manager's decision to leave fuels speculation he is interested in taking over from David Moyes at Everton.
Premier League: Tony Pulis quits Stoke City after seven years
His departure, by mutual consent, was widely anticipated following his talks earlier in the day with Peter Coates, the Stoke chairman.
"Stoke City and Tony Pulis confirm that they have mutually agreed that Tony will leave the club with immediate effect," the Potters confirmed in a statement.
Pulis, who following the retirement of Alex Ferguson and David Moyes' move into the Manchester United hotseat was the second-longest serving manager in the country, leaves Stoke in a far better position than he found them.
The 55 year old was appointed Stoke manager for a second spell in 2006, and under his watch the club gained promotion to the Premier League in 2008 after a 23 year-absence.
He led them to their first FA Cup final, losing to Manchester City by a single goal in 2011, and as a result their first Europa League campaign.
The Welshman moves on 48 hours after the end of the 2012/13 season with Stoke finishing in 13th place.
Contenders to succeed him are Roberto di Matteo, Gus Poyet, and Rafa Benitez, the outgoing Chelsea interim manager.
The news of his departure was greeted with surprise by Stoke winger Matt Etherington who said: "I've spoken to a few of the other boys and they're shocked as well, it's hit us," he said.
"Fans were grumbling saying they wanted him out or wanted a change but it looks like they have got their wish.
"You have to be careful what you wish for in football sometimes. You look at Charlton under Alan Curbishley and look where they are now.
"Hopefully it won't go that way for us, hopefully we'll get someone in who will push us on and make us into a top-10 team.
"If you look at where Stoke were when he first came in – mid-table in the Championship – you can't argue he's done a fantastic job."
However, a poor run in the second half of this season – during which the Potters won just three of their last 19 league matches and briefly diced with relegation – saw them finish with their lowest Premier League points tally.
Under Pulis Stoke developed a reputation for being over-physical and relying too heavily on the long ball.
But Etherington responded: "First and foremost he wanted us to be defensively very sound.
"You have to be solid or there is a big chance you will get relegated. That was his main priority, which was fair enough.
"There were times when we weren't pretty to watch but he had us well-drilled and that shouldn't be taken away from the job the manager has done.
"We have definitely got better players at the club than we had when I joined in the first season in the Premier League."
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