Glory owner Tony Sage warned contracts would be torn up if crisis talks failed to solve the dispute between Edwards and the club's players, led by Jacob Burns.
The two parties fell out over the coach's perceived favouritism of his two sons, Ryan and Cameron. Either Edwards or the 35-year-old Burns were expected to be forced out, with the pair's relationship untenable.
But player power has won out in Western Australia, with Edwards paying the ultimate price just 10 games into his three-year deal.
"It is extremely disappointing that this has played out in such a public manner, however as a club we needed to be considered in our analysis and prompt in our response," Sage said.
"Our review of what occurred on Friday and subsequently in the media, was not conducted to apportion blame or seek recriminations, but rather to identify the cause of the issues and to identify and to seek to implement a range of measures to improve performance and player management/best practice.
"In my view the measures were capable of being successfully implemented, which would ultimately improve the club. Alistair was unwilling to implement each of the measures required of him by Perth Glory, and as such he is no longer employed at Perth Glory.
"I am disappointed in this outcome, as we tried at all times to find a workable compromise, but ultimately the best interests of the players, staff, fans, sponsors and business partners of Perth Glory Football Club are my primary concern, and always will be.
"I thank Alistair for his contribution to Perth Glory Football Club and wish him all the best for the future."
Perth lie seventh in the A-League table, just one point off the play-off places.
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