It is understood the former Nottingham Forest and Watford sporting director has moved on following disagreements with the club's Chinese owners as to who should be appointed the Baggies next head coach.
Following the departure of Sam Allardyce, it was revealed last week that the club's English-based board – led by Dowling – wanted to appointed Chris Wilder as boss.
But that decision was vetoed by owner Guochuan Lai due to the way Wilder clashed publicly with Sheffield United owner Prince Abdullah bin Musa'ad bin Abdulaziz Al Saud during his time at Bramall Lane.
Unable to get their number one target, the Baggies turned to former Huddersfield boss David Wagner.
But despite entering advanced talks with the German, he then turned Albion down in favour of a move to BSC Young Boys in Switzerland.
That has effectively put Albion's search for a new manager back to square one.
And now it has been dealt a further blow with the news Dowling and club have decided to mutually part ways.
A short statement from the club said: "West Bromwich Albion Football Club and sporting and technical director Luke Dowling have today parted company by mutual consent.
"The club would like to place on record its thanks to Luke for his efforts during his three years at The Hawthorns.
"Chief Executive Xu Ke will later today release a statement regarding the ongoing search for a new head coach."