It's not clear at this stage who will replace Iraola, though Ipswich head coach Kieran McKenna is said to be admired by club bosses.
Iraola, who took over at the Vitality Stadium in June 2023 following the departure of Gary O’Neil, guided the Cherries to a ninth-placed finish in the Premier League last season, setting a new club-record points tally.
With Iraola’s contract set to expire in the summer, the club had been looking to agree terms on a new deal, but have now reluctantly accepted his departure.
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“AFC Bournemouth can confirm that head coach, Andoni Iraola, will leave the club at the conclusion of the 2025/26 season, bringing an end to his successful three-year tenure on the south coast,” a statement read.
Iraola, 43, has been linked with a return to former team Athletic Bilbao as well as the Manchester United job.
The news of Iraola’s departure comes just a few days after a memorable 2-1 win at Premier League leaders Arsenal and four days ahead of the trip to St James' Park, where the Cherries will face a Newcastle side in desperate need of a positive result.
“It has been an honour to manage Bournemouth and I am proud of what we have achieved together,” Iraola said on the club website.
"I’m thankful to the players and staff that I’ve worked with, as well as (chairman) Bill (Foley), who have all made my time here so special.
"As for the fans, you have continued to show your fantastic support to myself and the team, and for that I will always be grateful.
“I feel this is the right moment for me to step away, but I will always carry fantastic memories of this club.”
Owner Bill Foley said Iraola had helped shape a “clear philosophy” within the club, which returned to the Premier League under Scott Parker in 2022, having been relegated the previous campaign after five seasons in the top flight.
“Andoni has been instrumental in shaping the direction of this football club over the past three seasons,” Foley said.
“He brought intensity, innovation, and a clear philosophy that elevated Bournemouth both on and off the pitch.
“We are incredibly thankful for his leadership and will always have great memories of our time working together, as well as the things we accomplished.”
Bournemouth confirmed fitness coach Pablo de la Torre will also leave at the end of the season.