"Newcastle United can confirm that Willie Donachie has resigned from his position as reserve team manager with immediate effect," the Premier League club said in a short statement on their website.
British media earlier reported that Newcastle had suspended the 62-year-old former Manchester City and Scotland defender and were investigating an incident that occurred after the club's under-21 side lost 2-0 at Sunderland on Monday.
Former Millwall manager Donachie joined Newcastle in 2009 as assistant academy director and became development coach before taking over as reserve team manager.
(Writing by Ken Ferris; Editing by Toby Davis)