Rapids part ways with English coach Smith
"After meeting with Gary, we decided it would be in the best interest of both parties to move in a different direction," Rapids Managing Director Jeff Plush said in a statement.
"We would like to thank Gary for his many contributions to the Colorado Rapids organisation. He was instrumental in the Rapids winning our first MLS Cup last year and we wish him nothing but the best as he explores new opportunities."
Harlow-born Smith, 43, was an assistant with Wimbledon, Wycombe Wanderers and Watford in England after his playing career was cut short by injury.
He joined the Rapids as an assistant in 2008 but took over as head coach later that year.
After finishing fifth in the Western Conference with a 12-9-13 record this season, the Rapids went on to win a wild card game against the Columbus Crew before being eliminated from the play-offs by Sporting Kansas City.