The decision to sack the former Manchester United assistant coach came after the Blasters suffered a 1-3 defeat at home to Bengaluru FC on December 31.
Assistant coach Thangboi Singto will be temporarily in- charge of the side before the Blasters announce a replacement for Dutchman Meulensteen.
The Blasters, last season's runners-up side, are now at the eighth spot in the 10-team league table with just one win from seven matches. They have four draws and two losses to collect just seven points so far.
"Kerala Blasters and head coach Rene Meulensteen have decided to mutually part ways with immediate effect due to the latter's personal reasons," a release from Kerala Blasters said.
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"I like to thank the management, staff, players and amazing fans for this experience and wish them well for the future," Meulensteen said.
CEO of Kerala Blasters, Varun Tripuraneni, said, "The club like to thank Rene for all the hard work in his time at the club. The replacement would be announced soon."
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