The split stems from a difference of opinion over how the soccer team should move forward.
"This is first and foremost a question of respect, respect for the club and where it's heading in the future. I've had several discussions with Joey and [sporting director Nick de Santis] on how we could make it work and the conclusion was that this amicable split is the best solution for the club going forward," Marsch said Saturday morning.
Saputo was careful to point out that Marsch was not being fired, saying that the decision came from several long discussions and mutual agreement.
"This is not a dismissal or a resignation," he said.
Marsch leaves the team after a single season. The Impact finished just two spots out of the playoffs, ending with a better-than-expected 12-16-6 record.
Saputo said the Impact will be managed by in-house staff until the team hires a new coach.
Assistant coaches Mike Sorber, Mauro Biello and Denis Hamlett will remain with the team.
Marsch thanked the team and the fans and called the move "the right decision."