The move may be seen as a win for Antonio Conte after tensions grew during the summer over their transfer activity.
Emenalo has been at the club for a decade and has been the transfer guru for TEN different managers.
Blues boss Conte has been tipped to be given the boot at Chelsea in recent months after a turbulent start to the 2017-18 season.
But it is Nigerian Emenalo who has decided to end his association with the club - a huge blow to Roman Abramovich.
Emenalo is seen as the right-hand man to Chelsea's Russian owner - with Abramovich trusting him for advice.
During the transfer guru's ten-year stint in West London, the Blues got their hands on the Premier League title three times.
On top of that, Chelsea took home the FA Cup, League Cup, Europa League and Champions League trophies in that time.
Part of the reason for Emenalo's surprise exit could be the club's frustrating summer in the transfer market.
The activity - or perceived lack thereof - saw tensions grow between Emenalo, Conte and director Marina Granovskaia.
While Emenalo publicly got behind Conte - having helped bring him to the club last year - reports have suggested the Nigerian was not interested in an on-running power-battle.
It has been suggested he may now take up a similar position with French side Monaco.
Emenalo said: “This has been a very difficult decision to make, but one I believe is right for both myself and my family, and the club.
“I have had the privilege to work alongside some of the most talented people in the world of sport over the past 10 years, and I will depart incredibly proud of the achievements we have made.
"I wish Chelsea every success and look forward to following the club’s future triumphs from afar.”
Emenalo first joined Chelsea in 2007, while Avram Grant was in charge, taking on the role of scout.
He was promoted to first-team coach under Carlo Ancelotti - replacing club icon Ray Wilkins - a move which sparked real controversy.
In 2011, 14-cap Nigeria international Emenalo was promoted again to technical director and has been responsible for a huge amount of Chelsea's recruitment.
He oversaw the hugely successful transfer of Eden Hazard, as well as those including Cesar Azpilicueta, Thibaut Courtois, Kevin De Bruyne and Romelu Lukaku.
Emenalo was outspokenly frustrated by the lack of first-team action for De Bruyne and Lukaku at the Blues, who were both sold before going on to become superstars.
Chelsea will now be forced to look for a replacement before the January transfer window flies open.
Granovskaia said: “We are extremely grateful to Michael for his tireless work over the past 10 years.
"He has played an important role during the most successful period in the club’s history, helping make Chelsea the club it is today.
"We will now be reviewing our management structure, and Michael will be a part of that process as we look ahead.”