Athletic gave the news in a communique on the club's website, confirming what many had been expecting for the past few weeks, reports Xinhua news agency.
The former player, who was in his second spell and sixth season as the coach at the Basque club, recently set a new record for the maximum number of games in charge after spending 306 matches in the Athletic Club dugout.
The year 2016 saw Valverde take Athletic to their first trophy in 32 years when they beat Barcelona 5-1 on aggregate in the Spanish Supercup.
In his second spell at Athletic he has led the club to qualify for the European competition on three occasions and this will increase to four if FC Barcelona beat Deportivo Alaves in the final of the King's Cup on Saturday night after Athletic finished seventh in the Liga Santander this season.
Barcelona are looking increasingly like Valverde's next destination and the 53-year-old, who also played for the Catalan giants, is tipped to be named as the successor to Luis Enrique after Saturday's game.
Meanwhile Athletic's B-team coach, Jose Angel, 'Cuco' Ziganda is tipped to be named as Valverde's successor.
(This story has not been edited by Social News XYZ staff and is auto-generated from a syndicated feed.)
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