A former Penarol youth player who later spent time at the club during his professional career, Forlan was appointed coach in December last year.
In what was his first job in management, Forlan lasted just 11 games, winning four and losing as many.
Amid reports he had been sacked, the former Uruguay international – who played for the likes of Manchester United, Inter and Atletico Madrid – posted a message of thanks to Penarol.
“I have to leave Penarol but first I wanted to write a few words of gratitude,” he wrote on Twitter.
“Thank you for the opportunity you gave me, it was a pride for me to lead Club Atletico Penarol. To the players, thank you very much for your patience, your respect, your dedication and your teachings.
— Diego Forlán (@DiegoForlan7) August 31, 2020
“To all those who work day by day and in silence at Los Aromos, from my heart, thank you. Finally, thanks to the fans for the love.
“I have no reproaches, that’s how football is.
“Successes in whatever comes, up Penarol!”
Winners of three of the past five Uruguayan Primera Division titles, Penarol are seventh through nine games this season.
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