Kidney's future had been the subject of much speculation after shock defeats against Scotland and Italy contributed to their fifth-placed finish and their lowest ever world ranking of ninth.
The loss in Italy on the final weekend of the campaign led many to call for Kidney's resignation so today's announcement came as no surprise.
"The Irish Rugby Football Union today announced that it will not be offering a new contract to Declan Kidney after his current agreement ends (on 30 June next), with Declan's role as Ireland's senior men's coach ceasing today," said a statement on the IRFU official website.
"The decision was made following an in-depth review process carried out by the IRFU's National Team Review Group (NTRG).
"The IRFU thank Declan Kidney for the unquestionable commitment, passion, professionalism and success he has delivered to Irish Rugby to-date.
"The IRFU, through the NTRG, will continue the process of identifying suitable candidates for the Ireland Coaching role."
Les Kiss has been confirmed as the interim head coach for Ireland's summer tour of north America, with Gert Smal and Anthony Foley acting as his assistants.
Ireland will be hoping they can show a marked improvement against the United States in Houston on June 8 and then Canada in Toronto a week later following their dismal showing in the Six Nations.
They began their campaign with an impressive defeat of eventual tournament winners Wales at the Millennium Stadium, but that proved to be the highlight for Kidney's men.
Back-to-back defeats against England and Scotland were followed by a draw against France before another surprise loss in Italy on the final weekend.
There were some extenuating circumstances during the championship, with Ireland dealing with a debilitating injury list which robbed them of key players such as Paul O'Connell, Jonathan Sexton and Simon Zebo.
Kidney replaced the outgoing Eddie O'Sullivan as Ireland coach in 2008 and his crowning glory was undoubtedly leading them to the Six Nations Grand Slam a year later.
They were beaten in the World Cup quarter-final in 2011 by Wales, while they suffered a record 60-0 defeat against world champions New Zealand last year.
IRFU chief executive Philip Browne said: "We would like to sincerely thank Declan for his commitment to Irish Rugby.
"His contribution and involvement across the spectrum of Irish rugby delivered Under Age, Provincial, Grand Slam and Triple Crown success and epitomises his passion, belief and commitment to the game.
"With a host of new and emerging talent at every level, and despite the clear challenges ahead, we are confident of securing another world-class coach to work with this talented and ambitious group of players."