Haug played a key role in Mercedes' factory Formula One team signing Lewis Hamilton to partner Nico Rosberg in 2013.
He was also a vice-president of Daimler AG.
A team statement said: "His contract will come to an end by mutual agreement with the Board of Management.
"Preparations for the forthcoming season continue as planned."
Haug, who turned 60 last month, hinted that the team's poor performance since returning to the top flight of racing was behind the decision.
"Unfortunately, with one victory in 2012 since founding our own Formula One works team in 2010, we couldn't fulfil our own expectations," he said.
"However, we have taken the right steps to be successful in the future. Our team and our drivers will do everything to achieve these goals."
During his career, Mercedes-Benz and its partners have won six F1 world championship titles and taken 87 victories in the premier class.
"Norbert Haug was the face of the Mercedes-Benz Motorsport programme for more than 20 years," said Daimler CEO Dieter Zetsche.
"For me, he put his stamp on a whole era and, as a highlight, he was responsible for the successful comeback of the Silver Arrows to Formula One.
"I would like to thank Norbert for his extraordinary commitment to the three-pointed star."
Mercedes bought the championship-winning Brawn GP outfit at the end of 2009 and renamed it as their works team but have had just one win, with Rosberg in China this season, to celebrate since then.