De Canio took the helm in late October and guided the club to a 14th place finish in the Championship.
A statement from the Loftus Road club read: "Queens Park Rangers Football Club have parted company with first-team coach Luigi De Canio by mutual consent with immediate effect.
"The club would like to place on the record its thanks to Luigi for his contribution to QPR and wish him all the best for a successful future.
"De Canio also wanted to express his gratitude for the opportunity to manage Queens Park Rangers and also for the fantastic experience he had during his time in England."
De Canio has a wealth of experience in coaching in his homeland, having enjoyed spells in charge of the likes of Udinese, Napoli, Siena, Genoa and Reggina.