The 40-year-old former Holland midfielder joined Barnet in October 2012 as a joint manager alongside Mark Robson, and took sole charge soon after, but his reign has now come to an end with the club 10th in the Skrill Conference Premier following Saturday's 2-1 loss at Chester.
"Barnet Football Club tonight announce that Edgar Davids has resigned by mutual agreement from his position as head coach," the club said in a statement on www.barnetfc.com.
"Everybody associated with the club would like to thank Edgar for his contribution during his time here and for his help in putting together the current team structure.
"The club would also like to wish Edgar the very best of luck in what we have no doubt will be the continuation of an illustrious career."
Suriname-born Davids hinted last month that his playing career could be over after claiming he was being targeted by referees.
The former Ajax, Juventus and Tottenham man made his feelings known after he was sent off for the third time this season in his side's 2-1 defeat at Salisbury on December 28.
Davids bemoaned officiating in the fifth tier, saying it had taken the "fun" out of playing.
"I am a target, but it is okay. I don't think I am going to play any more because they are taking away the fun and I want the team to do well," he said at the time.
"If you look at the red cards, some are definitely red cards and some are exaggerated.
"It is hard to complete our tasks when a lot of decisions are against you."
Barnet were relegated under Davids last season and, during the summer, the Dutchman announced he would wear the number one jersey this term, despite the shirt usually being reserved for goalkeepers.
Davids won more than 15 major trophies as a player after making his debut with Ajax in 1991.
Capped 74 times by Holland, Davids secured the Champions League with Ajax in 1994-95 - as well as three Dutch league titles - before winning three Serie A league crowns with Juve.
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