The news ends three days of intense speculation at St James' Park with Keegan's relationship with the club's hierarchy understood to have broken down irreparably over the club's transfer policy.

Keegan, who returned to the club for a second spell in charge in January, had not taken training since the transfer window closed.

Keegan, in a statement released by the LMA, said: "I've been working desperately hard to find a way forward with the directors, but sadly that has not proved possible.

"It's my opinion that a manager must have the right to manage and that clubs should not impose upon any manager any player that he does not want.

"It remains my fervent wish to see Newcastle United do well in the future and I feel incredibly sorry for the players, staff and most importantly the supporters. I have been left with no choice other than to leave."

The Magpies insisted they had tried to come up with solutions to the problems he had raised in recent days, and appeared surprised by the news of his departure.

A statement said: "Newcastle United Football Club is sad and disappointed that Kevin Keegan has resigned.

"Over the last few days, the club has devoted itself to the discussions it has held with Kevin and as a result of those discussions, had put together a set of practical suggestions for how to move forward.

"The club made it clear to Kevin that if he had any outstanding concerns on its proposals, he should raise them with the club. The club regrets that Kevin has, instead of taking up that offer, chosen to resign."