The Sharks also announced that assistant coaches Jim Johnson and Jay Woodcroft and video coordinator Brett Heimlich have been fired.
McLellan coached San Jose for seven seasons, his first NHL coaching job. He accumulated a 311-163-66 career record and led the Sharks to six playoff berths.
"I want to thank Todd and his staff for their years of service to the San Jose Sharks organization," general manager Doug Wilson said. "Sometimes a change is best for all parties involved but nothing will take away from what Todd and his staff accomplished here over the last seven seasons."
In 2014-15, San Jose went 40-33-9 and finished in fifth in the Pacific Division, missing the playoffs for the first time under McLellan.
McLellan leaves as the franchise leader in wins (311), games coached (540) and points percentage (.637).
- Molly Geary