The 47-year-old has left the League Two strugglers by mutual consent after winning only 14 of his 46 league games in charge.
Hignett leaves Hartlepool in 19th place in the league table, four points off the relegation zone.
"I would like to place on record my thanks to Craig for all of his efforts," Hartlepool chairman Gary Coxall told the club's website.
"He has given everything for the club during his time in charge and he leaves with our very best wishes for the future.
"The search for a new manager will begin immediately and it won't be a long, drawn-out process - we want to get the right man appointed as quickly as possible."
Sam Collins will take temporary charge of Hartlepool while a full-time successor is sought.