The Foxes had been in discussions with Holloway over his future after the club were relegated to Coca-Cola League One earlier this month.
But chairman Milan Mandaric has revealed the two parties had opted to go their own ways and said: "This has been a very difficult story for all parties but, after taking stock and holding several constructive meetings, we have agreed that the time is now right."
Copyright (c) PA Sport 2008, All Rights Reserved.
Do YOU want to write for GiveMeSport? Get started today by signing-up and submitting an article HERE: https://www.givemesport.com/writeforgms