Simeone and San Lorenzo's board of directors had come to a mutual agreement for the former Argentina captain to leave the club he took charge of a year ago, they said on their website.
"The decision was Simeone's, although it's by mutual accord with the directors," club Vice President Guillermo Zoppi was quoted as saying.
"It's the best thing for the club," said Simeone, quoted by sports daily Ole on its website.
San Lorenzo, one of Argentina's traditional "Big Five", are 17th in the Clausura championship with 11 points, 16 behind leaders Independiente, who beat Arsenal 1-0.
Midfielder Sebastian Romero scored the only goal at San Lorenzo's Nuevo Gasometro ground after five minutes.
Independiente went seven matches unbeaten and opened up a five-point lead with their home win courtesy of a fine goal from Leonel Nunez, the striker's third in as many matches.
