The Norwegian, who is heavily tipped to take over from Morten Olsen as Denmark's national coach, announced on Wednesday that next week's final Champions League group game away to Real Madrid will be his last in charge, after two successful seasons at Malmö.
"I thank the club for two fantastic, fine years. Thanks to the players, my staff, all employees and thanks for all the support from the fans. It has been a fantastic time," Åge Hareide said in a statement.
"I have been told by Åge that he will not train us next year. We have had indications for some time, so the process of finding a new head coach is ongoing," says Malmö FF sports chief Daniel Andersson, in a club statement.
The Norwegian arrived at Malmö in 2014 to take over from Rikard Norling. He won the Swedish title and qualified for the group stages of the Champions League in successive seasons, earning the club millions in revenue.
His final match will take place next week in Madrid with Malmö needing to better the result of Shahktar Donetsk against PSG, to qualify for the Europa League.