Under the 73-year-old the 'Milli Takim' failed to qualify for the 2018 World Cup in Russia and were recently relegated to third-tier League C in the UEFA Nations League.
Current Besiktas boss Senol Gunes is being touted as a likely successor and the 66-year-old memorably led Turkey to the semi-finals of the 2002 World Cup.
Gunes, widely respected by his peers in Turkey and abroad, is "the first name" on the list of contenders, but the situation can "evolve", a TFF spokesman told AFP.
The TFF said it wanted a fresh start with the 2020 European Championship swinging into view.
"An agreement has been reached with national team coach Mircea Lucescu... regarding the termination of his contract" signed in 2017, the TFF said in a statement.
Turkey have been drawn in Group H for the Euro 2020 qualifiers alongside world champions France and the giant killers Iceland their main rivals.
Lucescu's time as coach was marked by disappointing results (four victories, six draws and seven defeats in 17 games), although new talents emerged such as Roma winger Cengiz Under or Wolfsburg midfielder Yunus Malli.
But Turkey's failure to qualify for last year's World Cup in Russia casts the biggest shadow on Lucescu's time as coach.
Former Turkey goalkeeper Gunes led Besiktas to consecutive championship titles in 2016 and 2017, so his club may be reluctant to let him go.
Local media reported that Besiktas, trained by Gunes since 2015, have already been on the hunt for a new coach in case of his departure.