Ashworth joined United on July 1st following a period of gardening leave at Newcastle but has departed after a rocky transition.
An exit was sanctioned after a meeting with chief executive Omar Berrada at Old Trafford following United's 3-2 defeat to Nottingham Forest on Saturday evening, as reported by The Athletic.
It is claimed that co-owner Sir Jim Ratcliffe had a key role in discussions which are said to have led to a mutual contract termination.
A club statement read: "Dan Ashworth will be leaving his role as sporting director of Manchester United by mutual agreement.
"We would like to thank Dan for his work and support during a transitional period for the club and wish him well for the future."
Ratcliffe is leading change at the club under Sir Dave Brailsford and had put Ashworth in charge of football performance, recruitment and operations.
Ashworth played a big part in United spending almost £200 million on recruitments, signing the likes of Leny Yoro, Manuel Ugarte, Matthijs De Ligt, Joshua Zirkzee, and Noussair Mazraoui.
He also had a role in United handing Erik ten Hag a new contract in the summer, as well as having a voice in the Dutchman's dismissal in October.