Blue Jays general manager Ross Atkins announced the move on Wednesday. Gibbons, 56, joined the Blue Jays in 2013 and led the team to the American League Champions Series in 2015 and in 2016. He also managed the Blue Jays from 2004 to 2008.
"Ultimately what we've decided is that John will not be returning as our manager," Atkins told reporters.
Gibbons posted a 791-787 record in 1,578 games as the Blue Jays' skipper. He posted a 10-10 record in the postseason. The Blue Jays have a 68-90 record and sit in fourth place in the American League East, 35.5 games behind the first place Boston Red Sox. The Baltimore Orioles are last in the division, 60.5 games out of first place.
The Blue Jays host the Houston Astros at 4:07 p.m. on Wednesday at Rogers Centre in Toronto, Ontario.
"We have been talking the last couple of months. Storm clouds were gathering," Gibbons said. "No doubt. It's just not from this side. I knew that was the reality of it. I have been here a long time. I agree, it's probably time for change."