Royle, 68, had been in charge of overseeing the club's youth development alongside recent interim manager David Unsworth since July 2014, and has even taken charge of the first team in between managers.
However, the former Ipswich Town and Manchester City man is said to have stepped down from his role just a matter of days into Allardyce's reign as Toffees boss. It remains to be seen if there is to be a replacement for Royle.
Royle's association with Everton first began way back in 1966, where he spent eight years as a senior player at Goodison Park - clocking up 232 appearances in the blue of the Merseyside giants and scoring an impressive 102 goals.
He moved to Manchester City in 1974, before spells with Bristol City and Norwich City as well as picking up six England caps. Retiring in 1982, Royle went straight into management with the Canaries.
Royle's departure seems to be out of the blue, with caretaker boss Unsworth choosing to return to his previous role rather than leave Goodison Park to find a new job.
It remains to be seen if the Everton icon is the only member of the backroom staff to leave, or an exodus is on the cards following Allardyce's takeover.