Gerry Kelly, CEO of Connacht Rugby, paid tribute to the work of Bradley since he took charge in 2003.
"Michael has done tremendous work since coming here," he said.
"It has been a huge benefit to Connacht to have a coach in charge who has coached the Ireland Under-21s, Ireland 'A' and the Irish senior side for the tour of New Zealand and Australia last year.
"Connacht Rugby has made huge strides since the advent of the professional era and Michael Bradley has led that progress for the past seven years.
"The number of players who have come through and gone to play at the highest level is testimony to that great work.
"It is now time for a change and we are making the announcement at this time to allow us time to find a replacement and to allow Michael ample time to weigh up his own options.
"I would like to pay tribute to Michael Bradley for all he has done for Connacht Rugby and wish him well in his career, and I look forward to continue to work with him for the remainder of this season," added Kelly.
Bradley said that he has enjoyed his time in Connacht but that it was now time to consider new challenges.
"I am grateful for the support I have received from CEO Gerry Kelly, the coaches, office staff and particular the players since arriving here in 2003," he admitted.
"Whilst not achieving the consistency in performance that all directors of rugby crave, Connacht has had some fantastic nights especially in the Sportsground and these are great memories.
"I would also like pay a special thanks to the Connacht supporters. They are an inspiration to our team and long may it continue.
"To the current squad there is a lot of rugby to be played this season. To qualify for the Heineken Cup would be a great way to sign off."