Paris Saint-Germain have announced that Leonardo will resign from his role as sporting director at the Ligue 1 champions once the summer transfer window closes in September.
French TV channel beIN Sport, which shares its president, Nasser Al-Khelaifi, with the club, broke the news before official confirmation quickly followed via PSG's official website that Leonardo, 43, will step down following the close of the transfer window on September 2.
"The club's board regret the decision, but respect it," a statement read. "It would like to express its thanks for the remarkable work accomplished in constructing in Paris a centre-stage European club. It wishes for him to continue his brilliant career with success."
Appointed in the summer of 2011 when Qatar Sports Investments took charge at the Parc des Princes, the former Inter Milan and AC Milan boss orchestrated a spending spree which eventually led to the club picking up the Ligue 1 title last season under Carlo Ancelotti, a coach Leonardo had worked hard to bring to the club in January 2012.
Following an incident in which he barged into referee Alexandre Castro in May, Leonardo was given a nine-month suspension from official matchday duties, which was then extended until June next year upon appeal.
The ban, however, would only have prevented him taking over from coach Laurent Blanc if necessary, but not carrying out his daily activities as sporting director.
After Blanc's appointment in June, Al-Khelaifi praised Leonardo for his work in finding a successor to Ancelotti, who had requested in May that PSG release him from the final year of his contract in order to allow him to take charge at Real Madrid.
French media reported on Wednesday morning that Leonardo had met with representatives of PSG midfielder Marco Verratti just the previous day to discuss a pay rise for the Italy international.