The Conference club made the announcement on Saturday following their 2-1 loss to Chester, which left them 10th in the fifth tier of English football.
After joining the club as player-coach in October 2012, the former Ajax, Juventus and Tottenham midfielder oversaw Barnet's relegation from the Football League last season, and has found himself at the centre of a number of controversies of late.
A statement on Barnet's official website read: "Everybody associated with the club would like to thank Edgar for his contribution during his time here and for his help in putting together the current team structure.
"The club would also like to wish Edgar the very best of luck in what we have no doubt will be the continuation of an illustrious career."
No announcement has yet been made with regards to Davids' successor.
