Westley has departed Deepdale with the club currently in 17th position in League One. It is understood that the 3-1 defeat to Yeovil Town last night prompted the decision, with the Lilywhites having won just one game since November.
The 44-year-old told BBC Sport on Tuesday: "When things aren't working, it's my responsibility to do all I can to right them."
However, a statement on the club's official website read: "Preston North End can confirm that manager Graham Westley has stepped down as manager."
Westley departs the club having won 16 of his 62 matches in charge.