Carlton have cited Stephen Silvagni's family conflict of interest as the reason for why the AFL great is leaving the club.
The Blues confirmed on Thursday night that Silvagni's five-year tenure as their list manager is over.
There had been speculation for several weeks that he was out the door, with reports of tensions between Silvagni and chief executive Cain Liddle.
But Carlton blamed growing difficulties around Silvagni's sons Jack and Ben playing for the club.
Silvagni's departure is particularly sensitive for Carlton because his family is Blues royalty, with three generations of players at the club.
"The difficult decision to not enter into a new contract with Silvagni ... centred around the increasing complexity of having two sons on the playing list," the Blues said in a statement.
"The situation is not only a conflict for the club's GM List Management and Strategy, but equally for those who work in and around him in the football department.
"Having the most senior list management staff member unable to participate in an increasing number of discussions and decisions relating to both list management and match committee is a situation that is not in the best interests of Carlton.
"While the decision to not renew his contract was an extremely difficult one to make, ultimately tough decisions need to be made that are in the best interests of the entire football club."
Jack and Ben Silvagni joined the Blues as father-son recruits.
Jack has played 60 games for Carlton and Ben is yet to make his senior debut after being drafted last year.
Their father twice declined to comment on his future when asked last week at the national draft.
Liddle praised Silvagni for his role as the Blues try to return to power.
"Stephen has left no stone unturned in striving to help bring this football club back to where we need to be and that is something every Carlton person is grateful for," Liddle said.
Silvagni's nickname is SOS - Son Of Serge - with his father playing 239 games for the Blues.
Stephen played 312 games for Carlton and was named full-back in the AFL's 1996 team of the century.
He was an assistant coach at several clubs and list manager at GWS before returning to Carlton in 2015.