Vitor Pereira said he was taken by "complete surprise and without any warning" after confirming his time as head coach of Nottingham Forest is over, with Oliver Glasner in talks to replace him.
Out-of-contract ex-Palace boss Glasner is at the top of Forest's list of potential candidates to succeed Pereira, who announced his departure as Forest boss on Wednesday night.
Pereira said in a statement: "Today marks the end of my journey as head coach of Nottingham Forest.
"I want to say a sincere thank you to everyone connected with this incredible football club.
"Although this decision came as a complete surprise to me and without any warning, I fully respect the club's right to make the decisions it believes are best for its future.
"Naturally, I am disappointed and saddened. I truly believed in what we were building together, and I leave with a sense of pride in everything we achieved over the past months."
Pereira signed an 18-month contract at the City Ground in February and guided Forest to Premier League survival and the Europa League semi-final.
But Forest have decided to move on from the Portuguese, with their attentions turning to Glasner.
The Austrian was linked with a number of top jobs across European football after he won the Conference League last season and the FA Cup the season before.
The 51-year-old is a free agent after his Palace contract officially expired.
A potential move to the City Ground for Glasner comes amid previous tensions between Forest and Palace.
Both indirectly went head to head for a place in last season's Europa League, with UEFA eventually ruling Forest would enter the second-tier competition at the expense of Palace.
The south London club were excluded due to previous co-owner John Textor holding a controlling interest in Lyon.
The outcome led to Palace fans holding up a graphic banner about Forest owner Evangelos Marinakis during their 1-1 Premier League draw at Selhurst Park on August 24.
Palace were charged with misconduct by the Football Association.
Despite their demotion to the Conference League, Glasner led the club to European glory with a 1-0 final win over Rayo Vallecano in May.
The victory means the Eagles will be playing in the Europa League next season, while Forest are without European football.
"Today marks the end of my journey as head coach of Nottingham Forest.
"I want to say a sincere thank you to everyone connected with this incredible football club.
"Although this decision came as a complete surprise to me and without any warning, I fully respect the club's right to make the decisions it believes are best for its future.
"Naturally, I am disappointed and saddened. I truly believed in what we were building together, and I leave with a sense of pride in everything we achieved over the past months.
"Together, we enjoyed a memorable end to the season. We secured the club's Premier League status, reached the semi-finals of the Europa League, and created moments that will stay with me forever.
"Most importantly, I saw a group of players grow in confidence, belief and togetherness.
"Watching them develop, fight for one another and represent this club with passion has been one of the most rewarding experiences of my career.
"I would like to thank my coaching staff, the players, everyone behind the scenes, and especially the supporters. From my first day, your passion, loyalty and unwavering support made me feel incredibly welcome. You were with us through every challenge and every success, and I will always be grateful for that.
"I leave Nottingham Forest with no bitterness or resentment - only respect, gratitude and wonderful memories.
"Football is full of unexpected moments, and while this chapter has ended sooner than I expected, I will always look back on my time here with pride and affection.
"I wish the players, the staff, the supporters and everyone at Nottingham Forest every success in the future.
"This is a special club, and I sincerely hope it continues to grow and achieve great things.
"Thank you for everything, Vitor Pereira."
