Coach Gennaro Gattuso has left Milan by mutual consent amid reports of financial cutbacks, the seven-time European champions announced on Tuesday.

Gattuso, who was under contract for another two years, was a controversial appointment in November 2017, but failed to qualify the club for next season's Champions League, finishing one point behind Inter in the battle for the fourth and final qualifying spot.

He played for the club between 1999 and 2012, winning both the Champions League and the Serie A title twice.

"Rino has given everything to our efforts this season, and has worked tirelessly, always taking full responsibility, putting the club above every other consideration. I want to say from the bottom of our hearts, thank you Rino," CEO Ivan Gazidis said in a statement.

The former battling midfielder joins ex-players in Filippo Inzaghi, Clarence Seedorf as recent coaching flops at the San Siro.

Sporting director Leonardo also announced his resignation after less than a year in the job on Tuesday.

Italian media reports said Gattuso and Leonardo's decisions were in response to spending curbs imposed by the side for the summer transfer window.

Faced with mounting debts and threatened with UEFA sanctions for breaking financial regulations, Milan are adopting spending curbs and seeking to boost their coffers by buying young, unproven talents who they hope to sell later for a profit, according to several reports.