The Manchester United legend was only in the job for one season.
The news comes as a shock to the Eredivisie side with a match still remaining this campaign.
The club said in a statement as cited by Sports Central: "Head coach Ruud van Nistelrooy announced this morning that he is leaving PSV. "PSV regrets his decision and is grateful to him for winning the Johan Cruijff Shield and the TOTO KNVB Cup and hopes to finish the season with second place.
He quit after falling out with the club's board at a meeting, believing he was not supported enough.
Van Nistelrooy informed his players before his departure and Fred Rutten will now take over for the meantime.
The Red and Whites need to avoid defeat to AZ Alkmaar this Sunday to secure a place in the Champions League qualification stage.
Successes have continued outside the league, with Van Nistelrooy guiding the club to a domestic cup and super cup win.
They were knocked out the Europa League to now finalists Sevilla in the play-off round after beating Arsenal 2-0 at home in the group stages.
He achieved this while also losing star man Cody Gakpo to Liverpool in January.
Van Nisteloory is a highly-rated boss having previously coached the PSV's youth-team and was assistant manager for the Netherlands national team for five years over two spells.
The 46-year-old won two titles with the club as a player before moving on to United where he won a Premier League.
He spent five years at Old Trafford and left for Real Madrid in 2006..