In his six years at the helm, the former international full-back led the Young Lions to four successive European Championship finals.
Pearce's side finished runners-up to Germany in the 2009 edition but things have regressed since and they left this summer's tournament in Israel without a point to their name.
That, coupled with England's group exit two years ago, led to the FA's confirmation today that Pearce will leave when his contract expires at the end of the month.
David Bernstein: "I'd like to thank Stuart Pearce for his hard work.
"Nobody can doubt his commitment to the job throughout his time as under-21 coach.
"He has done extremely well in qualifying for finals tournaments, but after the disappointment of the past two tournaments, we believe it is time to change coach.
"On behalf of everyone at the FA I'd like to wish Stuart well for the future."
Glenn Hoddle, Michael Appleton and Phil Neville have all been linked to the post, although Gareth Southgate is overwhelming favourite.
Source: Newcastle United Mad