The 60-year-old leaves after more than two years in charge in which he led the team to a 13th and 12th place finish in the league.
His position had come under scrutiny even before the club takeover, with fans frustrated by an uninspiring start to the new season — with the team currently second bottom in the Premier League having failed to win a game.
“I am grateful to everyone connected with Newcastle United for the opportunity to manage this unique football club,” Bruce said in a statement on Wednesday.
“I would like to thank my coaching team, the players and the support staff in particular for all their hard work. There have been highs and lows, but they have given everything even in difficult moments and should be proud of their efforts.
“This is a club with incredible support, and I hope the new owners can take it forward to where we all want it to be. I wish everyone the very best of luck for the rest of this season and beyond.”
The club said it was in the process of recruiting a new head coach and would not comment further at this time.
Graeme Jones will step in on an interim basis for the team’s match against Crystal Palace on Saturday.
There has been much controversy about PIF’s involvement in the takeover, but the consortium was apparently able to successfully demonstrate that Saudi Arabia would not have control of the club and could therefore pass the Premier League’s owners’ and directors’ test.
The new wealthy owners promise a fresh start for the club — after years of discontent over previous owner Mike Ashley — with fans excited about future investment in both the playing squad and managerial staff.
PIF is a sovereign wealth fund chaired by Saudi Crown Prince Mohammed bin Salman.
Its involvement in the takeover of Newcastle has been a long-running saga in English football, during which time Saudi Arabia’s human rights record, including the murder of journalist Jamal Khashoggi, has come under scrutiny.