Schaefer quits as Cologne coach early
Schaefer had said on April 19 he planned to leave at the end of the season, citing personal reasons.
Cologne lost 4-1 at fellow strugglers VfL Wolfsburg on Sunday, leaving the club in 14th place three points above the relegation play-off spot occupied by their opponents.
Sporting director Volker Finke, a former coach at Freiburg, will take over for the last three matches of the season.
"It's my responsibility to make the best decision for the club and the team," Schaefer said on the club's official website on Wednesday.
"Based on the recent results, and especially the way the team played, I've decided that the club urgently needs a change and new impetus. I've realised that I can't help the team the way it needs right now and thus decided to leave."
Schaefer took over from Zvonimir Soldo in October and at first steered Cologne away from danger but they have lost four of their last five games, conceding 18 goals.