The club were relegated from the Premier League at the end of the 2025/26 season, but they had been putting on a united front by claiming they would stand by the 43-year-old head coach.
However, now it's been confirmed that the club are moving in a different directed.
They said in a statement: "Following a comprehensive review at the conclusion of the season, the club has determined that a change in leadership is necessary as Wolves enters the next stage of its development.
"While the club recognises the significant challenges faced by Edwards and his staff during their tenure, and acknowledges the commitment and professionalism they demonstrated throughout, it ultimately concluded that a different sporting direction would provide the strongest platform for future success."
The process of appointing a new head coach "is already underway".
The club said they are "focused on identifying a leader who can help deliver the next phase of Wolves’ sporting development".
Executive chairman Nathan Shi acknowledged that Edwards came in during an "extremely challenging" time for the club, and insisted the decision to part ways was "difficult".
He added: “Our decision was not about character, professionalism or dedication.
"It was about determining what we believe gives Wolves the strongest opportunity to move forward from a sporting perspective.
“While there were positive signs and areas of progress, we ultimately concluded that a different football direction would better align with the style, identity and level of competitiveness we want to establish at the club.
“It would have been easier to continue with what was familiar.
"However, leadership is not about choosing the easiest path, but about making the difficult decisions we believe are right for the future of the football club which will put Wolves on the strongest platform to move forward."
Last month, Wolves' technical director Matt Jackson insisted the club's hierarchy was united in its support of Edwards.
Since the end of the season, Wolves have signed departing Newcastle United star Kieran Trippier on a free transfer, and it's said the now-former head coach was key to the deal.
As reported by BBC Sport, staff at Wolves are "stunned" by the move, with Edwards and his coaching team "blindsided" by the decision.
