Adams has been in charge since April last season, with former Manchester United assistant manager Mike Phelan taking charge of first team affairs for the time being.
Adams took over from Chris Hughton last April with the task of trying to keep the club in the Premier League, but with a run of four games to end their season against Liverpool, Manchester United, Chelsea and Arsenal, it was an almost impossible task.
In a statement released on the Norwich City website, Adams is to take a break from football and return to the club in July in a role that has not been specified, with former Manchester United assistant manager Mike Phelan taking charge of first team affairs for the time being - after being appointed a first team coach earlier on in the season.
Adams said: “I firmly believe that we are still on course for a crack at promotion back to the Premier League. That is where this club belongs.
“However, I feel it is in the best interests of the team that an immediate change is made in order to ensure a positive impact on results.
“It goes without saying that I sincerely hope the team achieves success this season and I would like to say a huge thank you to the supporters who have backed me during my tenure as manager.”
The Canaries are currently in seventh place in the Championship, three points off the play-off places, and ten points behind Ipswich Town who are currently occupying the second automatic promotion place.
The club state that Phelan is in charge of first team affairs until a new manager is confirmed. There was a little bit of talk that he was a replacement in the making from some sections of the media, and it is interesting to see how he does during his time in charge, and whether he will be considered for the manager's job on a permanent basis.