It is understood that the Liverpool legend, who took charge of the club in July 2023, has asked to leave the club due to personal reasons.
Gerrard will be walking away from a mammoth £15million-a-year contract having signed an extension last January.
Al Ettifaq are respectful of his decision and finalising an exit package.
The 44-year-old's assistant manager Michael Beale is also set to follow him out the door.
Beale only linked up at the club in November, nine months after he was sacked by Sunderland.
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Gerrard will leave after winning 19 of his 55 matches in charge, with Al Ettifaq currently sitting 12th in the Saudi Pro League.
Though it is believed this isn't necessarily the end of his relationship with Saudi Arabia as he could be open to a role in football development there.
Gerrard enjoyed a promising start to life at Al Ettifaq as they won six of his opening eight matches in charge.
However, they then went on a nine-game winless run from October to December 2023, although he then signed his contract extension.
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Al Ettifaq finished sixth in the Saudi Pro League and ten points off qualification for the AFC Champions League Two group stages.
Three wins from three at the start of this season sparked hope of improvement but their form dipped once again.
More to follow...