French media reported that Blanc had a signed a 22 million euro (18.35 million pounds) settlement contract with the club.
"Both parties have discussed and signed on June 27 a settlement contract that preserved their interests," PSG said in a statement on Monday.
Blanc's future at PSG appeared to be in jeopardy this month when club president Nasser al Khelaifi described the 2015-16 season as a failure because of the club's elimination from the Champions League by Manchester City.
PSG achieved their second successive domestic treble by winning Ligue 1, the French Cup and the League Cup, but Champions League progress stagnated as they lost in the quarter-finals for the fourth successive season.
Former France defender Blanc, a world champion with Les Bleus in 1998, coached the national team from 2010-12 and took over from Carlo Ancelotti at PSG in 2013.
He had signed a two-year contract extension in February.
Spanish and French media reported that Blanc would be replaced by Basque coach Emery, who left Primera Liga club Sevilla two weeks ago.
(Reporting by Julien Pretot, editing by Ed Osmond)
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