Jerome Champagne and FIFA issued a statement saying the world governing body's director of international relations would leave with immediate effect.
"FIFA and... Jerome Champagne hereby jointly announce that they have decided to part company," the statement said.
"The FIFA president would like to thank Jerome Champagne for the eleven years he has spent with the organisation as well as for the projects he has overseen during this time, such as... FIFA's relations with governments and the European Union."
Champagne is best known for championing Blatter's controversial plans to impose quotas on foreign players at clubs despite government opposition.
He is the second high-ranking official to leave FIFA in recent weeks after director of communications Hans Klaus stepped down in December.
"Jerome Champagne wishes 'to thank Joseph S. Blatter for the real privilege of having been able to serve the world of football over the years, all in the noble cause of helping to build a better world'," the statement added.
Sources familiar with the matter told Reuters that senior FIFA officials, including Blatter, had become concerned Champagne was exceeding his brief.
Seventy-three-year-old Blatter - head of FIFA since 1998 - said in October he will seek another five-year term in 2011.
Champagne, who could not be reached by Reuters on Friday, was charged with continuing to try and convince European governments to allow quotas to be imposed on foreign players at clubs, despite the European Commission declaring that such a rule would be illegal under EU law.
"Champagne's exit came as a surprise, but it could also be a window of opportunity for FIFA to try and reach a compromise with Brussels on this issue which has damaged relations between the sport and the EU," a Commission official said.
