Coppell had taken over at Ashton Gate in May and overseen a summer of spending including the big-name capture of England goalkeeper David James, plus Nicky Hunt, Damion Stewart, Albert Adomah and Tom Williams.
However, City lost their first game at home to Millwall at the weekend and were defeated at Southend in the Carling Cup in midweek. Keith Millen, who was City manager for nine games last season after Gary Johnson joined Peterborough, has been appointed as Coppell's successor on a three-year contract.
In a statement issued via the League Managers Association, Coppell said: “It is with the deepest regret that I confirm my departure from Bristol City. I have made my decision after very careful consideration and I believe that it is in the best interests of both the club and me personally that we go our separate ways.
“Bristol City is an excellent club, with brilliant support and a chairman with great ambition for the club’s future. Whilst I was looking forward to the challenge of leading the players in this season’s campaign, unfortunately, it has become clear over recent weeks, that I found I could not, for whatever reason, become passionate about the role and give the commitment the position demands.
“I appreciate that the timing of my departure is not ideal, but I believe it is best for the club to appoint a new manager or indeed appoint Keith Millen, who has a deep knowledge of the club and the squad, at this stage of the season. That individual can then make decisions on signing players before the window closes and work with the squad for the full campaign.
“I am retiring from football management but still feel I have a contribution to make to the game sometime in the future. I would like to sincerely thank the chairman and the board for their understanding and I wish the club and its supporters every success”.
Bristol City chairman Steve Lansdown added: “Steve’s prestigious career as a player, coupled with his experiences and successes as a manager are in no doubt. His footballing pedigree made him our prime target to manage the club early this year.
"It is disappointing for any club to part company with its manager at this stage of the season. However, we respect Steve’s decision, one that allows us the opportunity to appoint his successor and give that individual the full season to work with the squad”.
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