Usually known simply as Nuno, the Sao Tome and Principe-born coach was halfway through his contract when he departed one day after his team suffered a shock 3-1 defeat at Moreirense in their last league game of the season.
Porto finished second in the league, six points behind champions and arch-rivals Benfica. They kept up the chase for most of the season until their challenge faltered with home draws against Feirense and Vitoria Setubal.
They also reached the last 16 of the Champions League before losing to Juventus and suffered a shock elimination on penalties at the hands of Chaves in the Portuguese Cup.
"Porto and Nuno Espirito Santo reached an agreement on this Monday afternoon to end the coach's contract by mutual consent," said the club in a statement.
Porto won the Portuguese league nine times in 11 seasons from 2002/03 to 2012/13 but their dominance came to an abrupt halt, with arch-rivals Benfica winning the last four.
Since 2013, they have appointed Paulo Fonseca, Julen Lopetegui, Jose Peseiro and Nuno as coaches, while Luis Castro and Rui Barros have also been in charge on an interim basis.
Goalkeeper Nuno's playing career took him to Vitoria Guimaraes, Deportivo La Coruna, Merida, Osasuna, Dynamo Moscow and Aves, though he spent much of his time as second-choice.
He had two stints at Porto, the first from 2002-04 when he played second fiddle to Vitor Baia and the second from 2007 to 2010, when Brazilian Helton stood in his way.
Nevertheless, Nuno won a Champions League, Intercontinental Cup and UEFA Cup, four Portuguese league titles and three Portuguese Cup winners medals during those two spells.
His coaching career began as assistant to Jesualdo Ferreira at Malaga. He was named Valencia coach in July 2014 but was fired one year and four months later.
(Writing by Brian Homewood; Editing by Ken Ferris)
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