He succeeded Daniel Anderson as head coach of St Helens at the beginning of the 2009 season, signing a two-year contract.
In his first season in charge Saints lost to Leeds in the Grand Final for the third consecutive year, and were knocked out of the Challenge Cup by the Huddersfield Giants in the semi-finals.
"Mick has explained to us he has ambitions of possibly securing a place in the NRL and we wish him well in his endeavours," McManus said.
"He has been a great asset to our organisation and he will be successful wherever he goes."
McManus said the club would begin a search for Potter's successor in the coming weeks but at this stage had not had contact with any prospective coaches.
Potter has been touted as a possible successor to new England coach Steve McNamara at Bradford but says his preference for 2011 is to get a job back in Sydney, where his two grown-up sons still live, and believes announcing his decision now will improve his prospects.
"As you get older you want to be with your family," said Potter, who admitted he never got around to discussing a new contract with McManus.
"I spoke to Eamon last week and it was the way to go for me in all honesty. It clears the air for everyone. He can move forward and it gives me the opportunity to look around.
"It's the right time for me. Given the communications I've had in Australia, the opportunity that might come up maybe won't be there in another year.
"I'd love to get a head coaching job but there is a limited number in the country. I wouldn't rule out assisting someone. I'd enjoy that - perhaps not as much as I'd enjoy a head coaching role - but it's a case of getting back there. I've been away five years now.
"We'll see what unfolds down the track. I'm never going to say I'll never be in England again. If nothing comes up in Australia, there might be another opportunity left in England but my first thoughts are to get back to Oz and see if I can do something there."
BBC Radio Merseyside's rugby league commentator Ray French said: "It doesn't really surprise me if you sit down and think about it. Mick has been in Europe now for the best part of five years and had three glorious years with the Catalans Dragons and took them to Wembley.
"He has an excellent record at St Helens over the last 18 months and the form in recent weeks has been quite spectacular.
"The point about Mick's tenure at Knowsley Road is that he has had to contend with the break up of a great side. And the loss of one or two very experienced but ageing players and he has had to bring in a lot of youngsters.
"But he's brought them in and matured them and they are playing some superb rugby. Whether he wins trophies this year, I think that will have been Mick's testimony to St Helens."
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