The highlight of his tenure came during the European championships in 2016 during which Ireland reached the last 16 where they were beaten by the eventual finalists France.
Since those relative glory days, the side has slumped to several poor results leading to relegation to League C in Uefa's League of Nations.
Roy Keane, O'Neill's assistant, has also departed. "On behalf of the FAI board, I would like to thank Martin, Roy, and the management team for their work with the Republic of Ireland team over the last five years," said FAI president Donal Conway.
"Martin ensured that we enjoyed some great nights in the Aviva Stadium and on the road in Lille, Vienna, and Cardiff, which were fantastic high points for Irish football."
The FAI said its board would meet to discuss the selection of a replacement.