That decision resulted in the WRU asking him to stand down from his role as Head Coach for the final three games in the RBS Six Nations Championship.
"It has been a difficult time for Welsh rugby over the past few months and I am pleased to have come to a mutual agreement with the WRU that will now enable me to actively pursue new employment. As far as I am concerned this chapter in my life is now completed and I have no intention of making any further comment about it. I sincerely hope that this announcement will see an end to the constant speculation in the media," said Ruddock.
"I had hoped to have steered the Welsh side through to the end of the RBS Six Nations Championship, but although naturally disappointed, I fully understand and accept the Union's position. Since then I have been watching from the sidelines and supporting the Welsh team as a fan.
"I wish the whole of Welsh rugby and the new Welsh Coach, and in particular the Welsh team, every success in the future."
WRU Chairman David Pickering said: "The constant speculation in the media regarding Mike's decision to stand down has undoubtedly damaged the reputation of the game in Wales. Restoring this reputation is now an immediate priority for the WRU and its member clubs.
"Mike Ruddock has been an excellent ambassador for Welsh rugby and we wish him and his family all the best for the future. We were delighted to propose him for an OBE for his work with the team during the Grand Slam season and even more delighted when he was awarded his honour.
"Having agreed to honour Mike's contract, we are now faced with the task of finding a suitable replacement for him as Head Coach. Just as Mike now wishes to look ahead, so too must the WRU look to the future. We will not be making any further statements regarding this issue."