The Frenchman, who was appointed by the Merseyside club in November 2010, was responsible for bringing the likes of Luis Suarez, Stewart Downing, Charlie Adam and Jordan Henderson to Anfield, as well as £35m striker Andy Carroll.
Club owner John W Henry told the club's official website: "We are grateful for all of Damien's efforts on behalf of Liverpool and wish him all the best for the future."
The Reds' chairman Tom Werner added: "The club needs to move forward and we now have a huge game on Saturday. It is important that everyone joins us in supporting the manager and gets behind Kenny and the team and focuses on a strong finish to the season."
Comolli has revealed that "family reasons" were part of the 39-year-old's decision to depart the Premier League outfit.
"I am grateful to have been given the opportunity to work at Liverpool and am happy to move on from the club and back to France for family reasons," said Comolli. "I wish the club all the best for the future."
The Frenchman previously carried out stints at both Arsenal and Tottenham Hotspur acting as a scout for the North London clubs.