Concern for the former Town boss' future has been growing ever since Brian Caldwell left the club, and the club announced they were creating a new football board without consulting him.
But now after more than a month of waiting the club have confirmed he has left his position as manager.
Cotterill released the following statement though the LMA on Tuesday afternoon:
"I'm proud of the work that has been done by everyone in the past two and a half years at the club. From fighting relegation to a top half finish. I am confident this team will continue its progression next season.
"Working through Covid was tough and I have to thank my incredible staff for their help throughout.
"I would also like to thank the players. It is a fantastic group that gave me absolutely everything, right up to the last game of the season. The relationship I had with them was very special.
"When I joined Shrewsbury Town, I wanted to create a connection between the supporters and the team. Thankfully after a lot of hard work and your help we achieved that.
"Finally to all of you Shrewsbury Town Fans,
"Ole’ Ole’ Ole’.
"Love and best wishes, Steve."
The search will now be on to find a managerial replacement at the League One club.