Coyle: Houston, we have a problem
The 49-year-old, who took charge of the MLS club in December 2014 on a three-year deal, wishes to be closer to his family in England.
And the former Republic of Ireland international made the decision after speaking with Dynamo president Chris Canetti.
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Hide AdCoyle said: “I asked Chris if I could speak with him and I explained to him the challenge of being away from my family and how we all want the best for Houston Dynamo.
“I want to wish all members of the staff, from owner Gabriel Brener to president Chris Canetti to general manager Matt Jordan, everyone has been such a source of support, along with the players and the technical staff.
“I’d like to thank the Dynamo supporters, who have been outstanding.
“We have a brilliant club, and I have no doubt success is just around the corner.”
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Hide AdCanetti added: “It is unfortunate that we were unable to achieve the goals we set forth together and that we find ourselves mutually parting ways as a result of many professional and personal circumstances.
“Without a doubt, Owen brought many great qualities to the club since his arrival 18 months ago and made a positive impression on the people around him.
“He is an excellent coach and an even better person, and I wish him and his terrific family nothing but the best going forward.”