Parry's (left) relationship with Benitez has been strained
Rick Parry will leave his post as Liverpool chief executive at the end of the season after 12 years at the club.
The relationship between Parry, manager Rafael Benitez and American co-owner Tom Hicks has been strained and Hicks asked him to resign last April.
Parry branded the request as "offensive" but he has now decided the time is right to leave Anfield.
The departure of Parry is likely to take Benitez a step closer to finally signing a new deal.
BBC Sport understands the decision is the result of "mature" talks held over the past two weeks and the acceptance that Parry and Hicks can no longer work together.
In November Parry pledged his loyalty to the club after he was linked with the chief executive's post as part of the Football Association's 2018 World Cup bid.
He decided to remain at Anfield, despite being the top contender from a five-man shortlist for the job
Liverpool have been locked in a series of boardroom wrangles with Benitez looking to gain greater control over transfers in his protracted talks over a new contract and co-owners Hicks and George Gillett falling out.
Benitez insisted he had not won a power battle with Parry and pledged to work closely with him until the end of the season.
He said: "We have three months now of very, very important games so we must concentrate on that. We must be positive, work together and do what is best for the club.
"Our relationship has been good, professional. In terms of the personal relationship it has been good, because we both want the best for the club.
"I do not see the situation as a power battle. The owners have decided to do this, now we both have to work together. I am sure that Rick, myself and the owners will do this until the end of the season.
Parry said he had been proud to be part of the club for over a decade.
"I have had 12 very exciting years at Liverpool and am extremely proud of what has been achieved by the club over that period," he said.
Benitez denies power struggle with Parry
"The 1-0 victory in Madrid [on Wednesday] was a wonderful reminder of the many high points we have experienced and adds to the moments that make Liverpool and its magnificent fans so special.
"It has been a privilege to serve the club and as a lifelong supporter I wish the owners, Rafa, the players and the wonderful staff all the very best for the future.
"I will be leaving at the end of the season knowing that the club remains strong and with a set of supporters who deserve success in all that Liverpool does."
Liverpool co-chairman Hicks paid tribute to Parry's work at Anfield: "Rick's commitment to Liverpool Football Club is epitomised by his desire to ensure that this transitional period is managed efficiently and we are grateful to him for his help.
"He will always remain a friend of the football club," he added.
Fellow co-chairman Gillett added: "I would like to thank Rick for his significant service to the club and the assistance he has given us since we joined Liverpool. He has been integral to the club's success over the past decade and leaves with our best wishes for the future."
Former Liverpool defender Alan Kennedy backed Parry's decision to step down and believed there had been problems between Parry and Benitez.
"I don't think it's that big a shock, something had to give, something had to happen and unfortunately Rick is going to move on," Kennedy told BBC Radio 5 Live.
It is something that had to be done, whether it was Gillett and Hicks forcing the issue or Rafa Benitez we don't know
Liverpool great Alan Kennedy
"It is something that had to be done, whether it was Gillett and Hicks forcing the issue or Rafa Benitez, we don't know.
"When you look at the transfer system, Rafa has wanted certain players to come to the club and it just hasn't happened.
"Questions were asked over Robbie Keane, did the manager buy the player or did the chief executive? It's one of those situations, you have to have something between you and clearly this hasn't happened."
Kennedy added that Parry's decision to leave the club could pave the way for Benitez to commit his future to Anfield.
"Rafa has stalled on his contract which is a sign he wasn't happy with certain situations at the club," added Kennedy.
"Everything has to come to a head and the sooner something happened the better it is for the club.
"I think Rafa will now look upon his situation with Gillett and Hicks and say 'I'm signing the contract as simple as that'."
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