Byrne, a former top-grade Australian Rules player, took over in 2024 having successfully coached the Fijian Drua side in their first three seasons in Super Rugby Pacific.
"The FRU today announced that, by mutual agreement, head coach Mick Byrne will step down from his role, effective immediately," the union said in a statement.
"Following discussions about the future direction of the Flying Fijian programme, both parties concluded that it is in the best interests of Fiji Rugby to part ways.
"Under his guidance, from the Fijian Drua to the Flying Fijians, we have seen growth, resilience, and a commitment to the white jersey that will serve us well moving forward."
Byrne, who made the move from Australian Rules to become a highly-regarded skills coach with Scotland, the All Blacks, Japan and the Wallabies, said it had been an honour to work as a head coach in Fijian rugby for half a decade.
"I have been overwhelmed by the support of the world's best fans during my five-year involvement - their warmth and welcome have meant a great deal to me," the 67-year-old Australian said in the FRU statement.
"I remain fully committed to the game and wish Fiji Rugby every success moving forward."
Fiji made the quarter-finals of the World Cup for the third time in France three years ago after upsetting former champions Australia in their second pool match.
In July, the Flying Fijians will travel to Europe to play Wales, England and Scotland in the inaugural Nations Championship competition.
The FRU said former test flanker Senirusi Seruvakula, who has guided the Fiji women's team since 2020, had been appointed acting coach while Byrne's successor is identified.
(Reporting by Nick Mulvenney, editing by Peter Rutherford)