Villarreal exited the fourth round of the domestic cup competition after Wednesday's 2-0 home loss to Mirandes, the final straw for Garrido after Villarreal was also eliminated from the Champions League after losing all six of its group games.
Villarreal, which is 17th in the league and out of the relegation zone on goal difference, says the coach's successor has yet to be decided.
Garrido leaves after completing nearly two full seasons with the club.
A rash of injuries, including to international strikers Giuseppe Rossi and Nilmar Garrido, have hurt Villarreal's season.
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