The 46-year-old joined the Baggies in late June last year, having guided the Tykes into the play-off places after a fine spell in charge at Oakwell.
It was his success with the Reds which saw him recruited by West Brom following their relegation from the Premier League.
The Baggies have spent the entire campaign in the top six and were in the automatic promotion spots for a number of weeks early in the season.
However, Ismaël has now left the club after a run of four defeats from their last six games.
A club statement confirmed: "West Bromwich Albion Football Club can confirm Valérien Ismaël has today left his position as head coach.
"Assistant head coach Adam Murray has also departed The Hawthorns.
"The club would like to place on record its thanks to Valérien and Adam for their efforts and wishes them well in the future.
"The process of recruiting a new head coach is now under way and an appointment will be announced in due course."
West Brom are level on points with Middlesbrough and Huddersfield Town in the Championship table but sit above both Yorkshire clubs due to their superior goal difference. However, Boro have played a game fewer than both the Terriers and the Baggies.
Prior to leaving Barnsley last summer, Ismaël managed them in 44 games and left the club with a winning percentage just shy of 57 per cent. His record at West Brom has not been as fruitful with the 46-year-old winning 12 of his 31 games in charge at the Hawthorns.