Hebei made the announcement on social media after Pellegrini guided the team to a 2-1 win over Chongqing Lifan in the club's final league match before a two-month break for the World Cup.
"After amicable discussions with Mr Pellegrini, we have reached a mutual agreement," a club statement said.
"As of May 20, Mr Pellegrini will no longer work as the head coach of Hebei China Fortune Football Club.
"We sincerely thank Mr Pellegrini for his contribution to the club and we wish him all the best for the future." Chilean Pellegrini, 64, joined Hebei after leaving Manchester City in 2016 having guided them to the Premier League title in 2014.
During almost two years in the Chinese Super League, he took Hebei to fourth place in the table in 2017, narrowly missing out on leading them into the Asian Champions League for the first time.
Pellegrini has been linked with West Ham since David Moyes left the London club last week.
(Reporting by Michael Church, Editing by Ed Osmond)
