The experienced 67-year-old rejoined the club in the close-season, after a previous spell in charge between 2003 and 2006.
However, Braga have only won eight of their 20 league games this season, and a 2-2 draw with Arouca on Saturday saw the side fall six points adrift of a UEFA Europa League qualifying spot.
Three of Ferreira's backroom team will also depart their roles.
"SC Braga announces that it has agreed to an amicable termination of the contract with coach Ferreira and coaches Nuno Almeida, Rui Almeida and Sergio Vieira," a statement on the club's official website read.
"Please note that the administration of SC Braga acknowledges the contribution of Ferreira to the club, wishing him all the best in his future career."
Ferreira has enjoyed a distinguished career and oversaw a successful period at Porto, winning three straight league titles between 2007 and 2009.
Yet Braga have failed to produce on the pitch this season, losing to Pandurii Targu Jiu in the Europa League qualifying rounds, and also exiting the Taca da Liga earlier in February.
