"Porto has been notified of the intention of coach Andre Villas Boas to terminate, without just cause, his contract with the club, immediately activating his release clause," Porto said in a statement.
Porto added that the 33-year-old contract will be deemed terminated once the deposit for his 15 million euros release clause has been paid.
The coach, contracted to Porto until 2013, has been strongly linked with Chelsea who are seeking a new manager after sacking Carlo Ancelotti on the last day of the season in May.
Villas Boas, who worked as assistant and coach at Chelsea under Jose Mourinho from 2004 to 2007, joined Porto as head coach in June last year and led the club to a treble of Portuguese Premier League, Portugal Cup and Europa League.
He also worked under Mourinho at Porto and Inter Milan, before helping Academica Coimbra avoid relegation from the Portuguese Premier League after starting his career as head coach at the club in October 2009.
Villas Boas had said last month that his future was tied with Porto.
He became the youngest coach ever to win a European club competition when Porto beat compatriots Braga to lift the Europa League last month.
His rampant Porto team also became the first side since 1978 to complete the Portuguese league undefeated, clinching the title with a win at their rivals Benfica's Luz Stadium.
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