"He has led the England men's team with great resilience and empathy through an incredibly challenging period for English cricket, and he deserves our sincere thanks and gratitude.
"In the coming days Andrew Strauss will appoint a caretaker coach for the tour of the West Indies and will then consider the appropriate coaching structures to help England move forwards."
Graham Thorpe, Silverwood's assistant and batting coach in Australia, is expected to leave his position by the end of the week.
'It's been an absolute honour'
Silverwood joined England as bowling coach from Essex in 2017 after guiding them to promotion and winning the county championship.
Giles appointed him head coach in October 2019 ahead of more experienced candidates and he initially started well, winning series in South Africa and against West Indies and Pakistan at home. However, progress stalled in India last year as England rotated players to give them breaks from biobubbles but also to rest them for the Ashes later in the year.
The team's form never recovered. Silverwood was given full control when Ed Smith was sacked as chief selector in May last year - making him the most powerful head coach in the modern era. But England lost series to New Zealand and India, the first time in 20 years they were beaten in both home series in the same summer, before the 4-0 Ashes thrashing in which Australia were one wicket away from a whitewash.
Silverwood pays with his job for a series of selection blunders in Australia and the diminishing returns of his batsmen.
"It's been an absolute honour to be England head coach, and I'm extremely proud to have worked alongside our players and staff," he said. "I want to thank them all for the hard work and commitment they have given during my time in the role and I wish them all the very best moving forward.
"The last two years have been very demanding but I have really enjoyed my time with the team and working with [Joe Root] and [Eoin Morgan], and I am very proud of this group considering the challenges. I leave with fond memories and I am now looking forward to spending some quality time at home with my family and embracing the next chapter."