The former dual-code international was part of Stuart Lancaster's England staff for this year's Six Nations but is not expected to travel on the upcoming tour of South Africa.
In a statement Saracens said Farrell handed in his "surprise resignation" on Thursday evening.
Chairman Nigel Wray said: "We are sorry to see Andy leave, and we wish him well in the future."
The former Saracens centre Kevin Sorrell, who is currently on the coaching staff, has been promoted to the position of backs coach.
The departure of Farrell will provoke speculation he is set to rejoin the England set-up, but it is understood the 37-year-old will need to secure his release from a six-month notice period before linking up with Lancaster's squad.
Saracens initially allowed Farrell to work with England as backs coach throughout the Six Nations on an interim basis.
The Rugby Football Union subsequently appointed Lancaster as full-time boss and sought the services of Farrell, who rejected the chance to take a permanent position with the national side, instead opting to focus on his job at Saracens.
Farrell joined the Sarries' backroom staff in 2008 and helped director of rugby Mark McCall guide them to a maiden Premiership title in 2011."The job isn't anywhere near half done, and I have decided I want to help finish the job," he said at the time.
http://www.bbc.co.uk/sport/0/rugby-union/18294456
