The 48 year old is regarded of one of the top youth development coaches in the country, and during his time as academy director he oversaw the development of many of Town's stars in recent years such as Kieron Dyer, Darren Bent, Titus Bramble, Jamie Scowcroft and Richard Wright.
Klug also spent time as Jim Magilton's assistant at the club during the Northern Irishman's spell in charge of the club, but last season took on a new role of head of football development at the club.
It's widely expected that the football club and/or Klug will comment more on the reasons for the parting of ways in the coming days.