Holley's departure comes hot on the heels of the announcement earlier in the year that director of coaching Scott Johnson is leaving at the end of the season to join Andy Robinson's Scottish coaching team.
"It has been a rollercoaster ride at the Ospreys, but I can honestly say I have thrived on it, put my heart and soul into it and tried to embrace it. I could not have survived the constant expectation and pressure that comes with the job without the support of my family and friends, many of our true supporters, and in particular the team management and the players," said Holley.
"Lots of young Welsh players have passed through my tenure to the international ranks and I'm very proud of that as well as the trophies we have won and the special nights at the Liberty in particular. We've been the most successful Welsh region in so many disciplines through the first nine years and although regional rugby is going through tough, transitional times I feel I am leaving the rugby department in good shape with excellent young coaches and players.
"It's going to be a very different way of life and a difficult one at first. I guess I've become part of the furniture! However that has also become part of the issue and I've done a lot of on field coaching as well as off-field work during this job. I have a young family to consider so it's time I took a bit of a break from it and recharge myself.
"I am still only 41 and so I feel I've got a lot offer. I have learned a lot in my time here and achieved a lot too. I am now looking forward to exploring some new challenges and opportunities that have been presented to me and to enjoying the next part of my career."
Mike Cuddy, managing director of the Ospreys, praised Holley for his efforts at the Region: "Sean has been an excellent servant to the region over the last nine years and can be justifiably proud of all he has achieved with the Ospreys.
"As part of an ambitious organisation, he has helped to take the Ospreys to silverware, with three Celtic League titles, and the Anglo-Welsh Cup, as well as reaching the three Heineken Cup quarter-finals.
"The Ospreys lead the way in Wales in terms of players produced for the national set-up since the inception of regional rugby, and also, in terms of players representing their home region in ERC competition. Sean has played a considerable part in those achievements.
"Professional sport, and top level rugby in particular, is a fast moving and ever changing environment, and after nine years in office we feel that the time is now right, particularly with Scott also moving on, to freshen things up and look at alternative options."
"Sean is in agreement with us that in order to move forward professionally, he too is now in a position where he needs a new challenge, and by moving on with immediate effect, it allows both him and the Ospreys to draw a clear line under the past and move forward with a fresh impetus."