Pulis was quickly embraced by Palace fans last season when he took over in the middle of the campaign and led the Eagles out of the relegation zone and ultimately to an impressive 11th-place finish in the Premier League.
But Pulis was reportedly at odds with club chairman Steve Parish over the team's transfer policy after the club failed to sign many of his top transfer targets.
The Eagles have managed to sign three players: former Liverpool defender Martin Kelly, Brede Hangeland from Fulham and forward Frazier Campbell from Cardiff City, but that apparently wasn't enough to satisfy Pulis.
"It's up to the manager, the players we sign. It's not up to me. I'm there to help him get the squad he wants," Parish told British television network Sky Sports.
An 11th-place finish was the club's highest finish since the launch of the Premier League in 1992, and Pulis had hoped to build on that achievement over the summer, but it now appears his future is elsewhere.
Assistant manager Keith Millen will take charge for Saturday's Premier League opener against Arsenal at the Emirates Stadium.