Royle took over at Oldham in March with the side sitting fourth under the former Everton & Manchester City manager, bus since taking charge Royle has failed to win a match and has seen the Latics drift into a mid-table position.
Confirming the news, Oldham Chief Executive Alan Hardy said: When Joe kindly agreed to help us out six weeks ago, it was always with just the last nine games of the season in mind and at that stage a longer arrangement was never considered.
"After openly discussing the situation with the owners and myself, Joe felt that the best option for the club to take was to look for a younger man to take the helm.
"However Joe has agreed to continue to help, but without the day-to-day involvement. Joe came to help us at a very difficult time, but he has been able to address a number of issues and prepare a blueprint for next season."
Click here for Stats on Joe Royle's years as manager of Town.