The 50-year-old replaced Julian Nagelsmann at the German champions in March 2023 on a deal until June 2025.
But the former Chelsea boss will depart a year earlier than planned as part of “a sporting realignment” at Bayern.
He led Bayern to last season’s Bundesliga title after taking over in the spring but they now sit eight points behind leaders Bayer Leverkusen after back-to-back league defeats.
One of those was an emphatic 3-0 loss to Leverkusen – and they were also beaten 1-0 by Lazio in the first leg of their Champions League last-16 tie.
Bayern CEO Jan-Christian Dreesen said both parties agreed to “mutually end our collaboration” following “an open, good conversation”.
“Our goal is to carry out a sporting realignment with a new coach for the 2024-25 season,” he added.
“Until then, every individual in the club is expressly challenged to achieve the maximum possible in the Champions League and the Bundesliga.
“I also explicitly hold the team responsible. Especially in the Champions League, we are convinced after the defeat at Lazio we will advance to the quarter-finals with our fans behind us.”
Tuchel, who has also managed Paris St-Germain and Borussia Dortmund, said: “We will leave after this season. Until then, my coaching team and I will continue to do everything we can to ensure maximum success.”
The German, who won the Champions League with Chelsea in 2021, oversaw a quarter-final defeat at the hands of eventual winners Manchester City in Europe last season.
However, his Bayern side were able to pip Borussia Dortmund on the final day of the Bundesliga campaign – because their rivals drew 2-2 at home to Mainz – to seal an 11th straight German title.
England captain Harry Kane arrived from Tottenham Hotspur in a deal worth an initial 100m euros (£86m) in the hope of securing domestic and European success.
But a damaging period has seen Bayern slip further behind Xabi Alonso’s Leverkusen side in the Bundesliga and they also must overturn a first-leg deficit against Lazio to stay in Europe.
Sunday’s 3-2 defeat at Bochum was their third in a row in all competitions.
