The former England captain, who first joined the national setup as a consultant batting coach in November 2009, was informed of the decision by captain Alastair Cook.
"I have many fine memories from the relationships formed with the players and staff and I know that I have given my best and I have tried to give it every day," said Gooch in a statement.
"After discussions with Alastair Cook, he informed me that he was in favour of change. Although this was sad news, I respect his, and new coach Peter Moores's, right to implement this change of direction. In my opinion Alastair is the right man to captain England - he commands respect and will always put his body on the line for his country.
"He will face many challenges and have many more tough decisions to make before his journey ends. Over the last decade or so, he has been the ultimate professional to work with and it has been an honour to see him develop."
Gooch, who became full-time batting coach in 2012, switched his focus to the Test team after handing over the limited-overs role to Graham Thorpe last year.