Smith, whose second stint with the club was supposed to run until June this year, will return to his native Australia for family reasons, a statement said.
"London Irish is grateful to Brian Smith for the contribution he has made to the club," executive chairman David Fitzgerald said. "He led us to the greatest experience we've had to date of European rugby and introduced some great players."
During his first spell with London Irish, Smith took the modest club to third in the Premiership and also to a Heineken Cup semi-final against Toulouse at Twickenham.
He then joined England's coaching team under Martin Johnson but left after the 2011 World Cup.
Since returning to London Irish in 2012 the team has failed to reach similar heights and are second from bottom, although almost certain to retain their top-flight status.
(Reporting by Martyn Herman, editing by Alan Baldwin)
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