Kangaroos players were called to an impromptu meeting on Wednesday morning, when Clarkson's departure was confirmed, with the AFL club to start the hunt for a new coach.
Clarkson was contracted until the end of 2027, when his initial bumper five-year deal with the struggling Kangaroos was due to end.
After consulting with players and football department staff, North's hierarchy instead decided to move on Clarkson this off-season, informing the coach of their decision on Tuesday.
"We asked Alastair to give our club stability and strength and help return us to the top of the AFL ladder," North president Sonja Hood said in a statement.
"Four years later, we have created an environment where our staff and players want to be at our club.
"This is a testament to the culture Alastair has helped create and the belief that he has built in this group.
"Although we have clearly made progress and won more games, we won't shy away from our desire to want more from this talented group.
"We are incredibly grateful to Alastair for the work he's done over the last four years and we wish him all the very best for his next chapter."
In August, Clarkson said he wouldn't be pushing for a contract extension this off-season and was happy to wait it out.
"All I require is a handshake and a wink and a nod, and that'll do me," Clarkson said at the time.
The former Kangaroos player arrived at the club with much fanfare, having coached Hawthorn to four premierships in an era-defining stint from 2005 until 2021.
Clarkson was appointed North coach in August 2022, but the start of his tenure was quickly overshadowed by the emergence of the Hawthorn racism saga in September that year.
Racism allegations against the club and Clarkson, his former assistant Chris Fagan and former welfare manager Jason Burt were aired publicly.
Clarkson, now-Brisbane Lions mentor Fagan and Burt all strenuously denied any wrongdoing, while an AFL investigation found no adverse findings against the trio in May 2023.
Hawthorn settled the Federal Court case with the affected Indigenous former players in November 2024.
Clarkson's departure comes despite North's improved season in 2026, when they finished 14th and claimed nine wins.
The 58-year-old finishes at North with a 25 per cent winning record (20-1-61) from 82 games.
The Kangaroos are the third club to part ways with their senior coach this year, after Carlton sacked Michael Voss and Essendon fired Brad Scott.
Hood and football boss Todd Viney will front the media on Wednesday afternoon.
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