Spalletti had showdown talks with Roma’s board yesterday following their end-of-season win over Genoa on Sunday.
His contract was due to expire this summer and Roma issued a statement confirming Spalletti will not renew his deal.
“AS Roma have parted company with coach Luciano Spalletti,” the statement read.
“The process to appoint a new coach is now underway. The official announcement comes after the team beat Genoa 3-2 on Sunday evening to clinch second place in Serie A and secure automatic qualification to the 2017-18 Champions League.
“Spalletti joined Roma for a second time as coach in January 2016, having won two Coppa Italia and one Supercoppa during his first stint in the capital between 2005 and 2009.”
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Spalletti’s departure has fuelled reports that he is set to take up the vacant role at Inter Milan.
And that is a massive boost for Chelsea, who appear to have successfully blocked Inter’s move to appoint Blues manager Antonio Conte.
Inter were willing to offer Conte a mega contract and a £127million transfer fund to quit Stamford Bridge and return to Italy.
Express Sport understands Chelsea owner Roman Abramovich has worked hard to convince Conte to stay.
Roma manager Luciano Spalletti has left the club
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Luciano Spalletti is now the favourite for the Inter Milan position
Chelsea manager Antonio Conte looks set to remain in west London
The 53-year-old won the Premier League in his first season in charge of the club but has admitted his future is not yet resolved.
However, a deal to join Inter now appears to be off the table, with Spalletti now the firm favourite to land the San Siro role.
Inter are desperate for a return to their former glory and have new Chinese owners prepared to pump money into the club.
They finished seventh in Serie A this season – out of the European spots for next term.