Hendry had been in charge at Bloomfield Road since June 2004

Former Scotland international Hendry took the reins at Bloomfield Road in June 2004, succeeding Steve McMahon.

But he was removed from his job two weeks ago, with reserve team coach Simon Grayson taking temporary charge.

Agreement has been reached for Hendry's permanent exit and chairman Karl Oyston said: "I would like to thank Colin for all his hard work."

Oyston went on: "I am sure he has taken many positives from his time at the club and I am sure he won't be out of the game too long."

Hendry said: "It has been a great learning curve, and I would like to thank Blackpool FC for the opportunity it has given me. It certainly has whetted my appetite for management and I would like to wish the players and supporters every success in the future."