The decision brings to an end, at least temporarily, a pro career in which Arena became the most successful manager in the league's history, the Carson-based team said in a statement.
[Ads /]
During his six-year stint with the Galaxy, Arena led the club to three MLS Cups while compiling a record of 125-70-79.
In a news release, he described his time with the team as "among the most memorable and meaningful years in my entire career," adding that it was "difficult to leave this great club."
[Ads /]
The search for his replacement will begin immediately, according to the statement issued by the Galaxy.
Arena will return to the men's national team for a second time, having previously coached the squad from 1998-2006. The team's record was 71-30-29 during that stretch, during which it advanced to the quarterfinals of the 2002 FIFA World Cup.
U.S. Soccer Federation President Sunil Gulati, who fired Arena in 2006, said in a statement that the 65-year-old's "experience at the international level, understanding of the requirements needed to lead a team through World Cup qualifying, and proven ability to build a successful team were all aspects we felt were vital for the next coach."
"I know Bruce will be fully committed to preparing the players for the next eight qualifying games," Gulati continued, "and earning a berth to an eighth straight FIFA World Cup."
Arena, a U.S. National Soccer Hall of Fame inductee, is replacing coach Jurgen Klinsmann, who was terminated on Monday.
The Associated Press contributed to this report.