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"We will not extend our cooperation with Dieter Hecking beyond the summer and we will go into the new season with a new head coach," the club said in a tweet.
Hecking, 54, has been in charge of Gladbach since December 2016, and led them to ninth-place finishes in each of his first two seasons.
After some brilliant early-season performances, Gladbach had spent much of the current campaign in the top three, but a recent run of bad form has seen them drop to fifth.
They have won just one of their last seven games, and suffered a humiliating 3-1 defeat to local rivals Fortuna Duesseldorf last weekend.
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