Nicol out as New England head coach
The Revolution, who failed to reach the play-offs in the past two seasons, said on Monday the two sides mutually decided to part ways, ending what was the longest-serving coaching tenure in the North American league.
"We all agreed a change of direction was needed to reverse the trend of the past couple of years," Jonathan Kraft, the Revolution's investor/operator, said in a statement.
"Stevie was a successful head coach and a tremendous ambassador for the Revolution for the past decade and set a high standard for success."
Nicol led the Revolution to the title-deciding MLS Cup four times - 2002, 2005, 2006 and 2007 - but they were beaten on every occasion.
The Scotsman played for Liverpool from 1981 to 1995 and was part of five English championship winning teams and the 1984 European Cup triumph.
"I'm very thankful to the Krafts for giving me the opportunity to be their head coach," Nicol said.
"I've had some great times and been involved with some great players and great people. My family will always remain part of the Kraft family."