Lugt, who joined Sydney FC in September 2009, will remain at the Club until the end of the 2011 AFC Champions League campaign in May. He will pursue his career either in Australia or overseas.
"I have thoroughly enjoyed continuing building the foundations of our Club, in particular by further strengthening the relationship with our Fans as well as with the wider community including grassroots football. Without fans there is no football club," Lugt said.
"Although the environment is very challenging Sydney FC has got enormous potential; it will take time to build but I hope one day the Club reaches that potential.
"I am happy that I have been able to make a contribution to this process during the last 18 months but it is now time to move on.
"In order to run a football club you need to have passionate football people around you to make it a success and I want to thank all the Sydney FC staff for their extremely hard work during my tenure. They produced great results for the Club."
Sydney FC Vice-Chairman Scott Barlow said: "On behalf of the Board I would like to thank Edwin for the contribution he has made to Sydney FC during his time at our club and wish him all the best for the future."