The departure was confirmed on Monday, the day after Portland's 3-1 home defeat to the San Jose Earthquakes, with MLS now entering its mid-season break for the World Cup. The Timbers sit 13th in the 15-team Western Conference, with 14 points from 14 games this season.
Neville, 49, joined Portland in November 2023 ahead of the 2024 MLS campaign and ends his tenure with an overall record of 27 wins, 31 defeats and 24 draws in 82 games — a win rate of just under 33 per cent.
Owner Merritt Paulson paid tribute to the former Manchester United and Everton defender in warm terms even as the club acknowledged that results had fallen well short of expectations.
"In my nearly two decades of owning and operating the Portland Timbers, there are very few people I have enjoyed working with more than Phil Neville," Paulson said. "Phil has outstanding leadership qualities and a boundless sense of positivity even in the face of adversity."
The club had reached the MLS play-offs in both full seasons under Neville but failed to progress past the first round on either occasion.
Neville spoke candidly in his own statement.
"I realize we are in a results business, and the results haven't been to the expectation of this football club," he said. "To the Timbers Army — you are the reason I felt inspired to try and bring success to this club. Keep getting behind the players and the club in this wonderful city."
Monday was a doubly difficult day. Salford City, the League Two club co-owned by Neville alongside the rest of the Class of '92, lost their play-off final at Wembley to Notts County.
Before Portland, Neville had managed England Women from 2018 to 2021 and then Inter Miami in MLS before his sacking from the Florida club.
Portland will not name an interim head coach while MLS is on its World Cup break. Their next fixture is at the Seattle Sounders on July 16.