O'Callaghan said: "We announced our departure to the new coaches and the players. We part the club by mutual agreement, in the most amicable fashion and for the best business reasons."
As a player, O'Callaghan won two Wales Senior Schools caps in 1975 and a Cambridge University Blue three years later. He often led Crawshays Welsh and played 96 games for Aberavon and made 135 appearances for Bridgend as a lively flanker.
As a coach, he took Jones with him in November 1999 as they picked up an ailing Aberavon. In the following season they won the Division One title, losing to Caerphilly in a play-off for promotion, but the Wizards again captured the title the following season and finished runners-up to Pontypool in 2002-03.
Last season they finished fourth in the Premier Division and reached a Konica Minolta Cup semi-final at the Millennium Stadium where they lost to Caerphilly.
He chose new coaches during the summer with Kevin Hopkins, the former Swansea and Wales centre and Swansea, Ebbw Vale and Wales Under-21 for the backs and powerful Mark Jones, the Neath, Ebbw Vale and Pontypool lock/No 8 as forwards coach.
O'Callaghan said: "I'm delighted that both have come to Aberavon as they will provide a different perspective on the way we play. As I am now an Aberavon supporter from the terraces,they will have my unreserved support and I hope the support of all true Aberavon supporters."
Aberavon chairman Andrew John accepted the resignations with some sorrow and
confirmed: "We part by 100% mutual agreement and on the best of terms. What they have done with this club has been magnificent.
Hopkins was also full of praise for O'Callaghan, stating: "Chris was a passionate Aberavon man through and through and always fully committed. Mark and I now just want to continue all the good work that he has done."