"Yesterday the FA of Thailand and me cancelled the contract in mutual agreement. I am very sad about this development. I had a fantastic time with the kindest and good hearted players," Schaefer said, adding he would provide more information soon.
Thailand's Football Association were not available to confirm the move, which has been long expected.
Schaefer, 63, was heavily criticised for the national team's poor performance in the recent Asian Cup qualifying matches.
The former Cameroon coach was hired by the Football Association to coach Thailand's national team in July, 2011.//DPA