Kevin Keegan

Manchester City have confirmed the departure of manager Kevin Keegan.

Keegan has left the club by "mutual agreement" after serving just over three-and-a-half years of his five-year contract.

The former England coach's position had become increasingly untenable following his refusal to consider extending his stay at Eastlands beyond 2006.

A statement on behalf of the club confirmed: "Manchester City announces that by mutual agreement our manager Kevin Keegan will leave the club with immediate effect.

"We all believe this is in the best interests of the club.

"Kevin's professionalism, infectious enthusiasm and drive for success have benefited all areas of the club.

"The board and staff of the football club would like to thank Kevin for his valued contribution to all aspects of our organisation and wish him and his family all the very best for the future."

Although it is 12 months since Keegan first indicated his intention to end his managerial career at the end of his contract, speculation about his future has been mounting in recent weeks.

Former Blues' star Andy Hinchcliffe was among those to suggest that Keegan should go immediately, while even keeper David James said it was time the players found out whether Keegan intended seeing out the final year of his deal.

The 54-year-old Yorkshireman hardly clarified the situation prior to Monday's defeat by Bolton when he said he would like to stay until 2006 but if chairman John Wardle "tapped him on the shoulder, then I would be gone".

It appears Wardle, who has ploughed his own money into City and is a long-time ally of Keegan, has finally decided the situation cannot continue.