THE Italian jockey rode nine English Classic winners for Godolphin and partnered the great Dubai Millennium to glory in the Dubai World Cup of 2000, one of his three wins in the world's richest race.
Dettori, who rode Godolphin's first Classic winner, Balanchine, in 1994 and has been associated with many of the stable's top horses since then, said: "I have had 18 wonderful years.
"Godolphin has been a major part of everything I have achieved in racing and I have loved every minute of it.
"I feel the time has come for a change. My position in the stable has changed a little bit and I need a new challenge.
"Sheikh Mohammed has been an unbelievable boss to me. He had the confidence to take me onboard when I was young and we smashed every record together. I will be forever grateful to him for everything he has done for me and for my family."
Dettori, who earlier this month teamed up with the Coolmore operation to ride Aidan O'Brien's Camelot in the Prix de l'Arc de Triomphe, has been sharing the Godolphin rides with fellow retained riders Mickael Barzalona and Silvestre de Sousa, who will continue in their roles in 2013.
Barzalona rode Encke to victory for Godolphin in the Ladbrokes St Leger at Doncaster in September when Dettori picked up a spare ride on Michelangelo for trainer John Gosden.
A host of Dettori's big-race winners have been trained by Saeed bin Suroor, including four of those that formed the rider's 'Magnificent Seven' at Ascot on September 28, 1996.
The pair were in Milan on Sunday where Dettori steered Retrieve into second place in the Group One Gran Premio Del Jockey Club Italiano at San Siro.
Speaking from Milan, where he was supervising Godolphin's runner, Bin Suroor said: "We have been good friends and have travelled all over the world and have had great times.
"We have been like brothers. I have seen him every morning and sometimes we come back after midnight from racing.
"He has done a great job for Godolphin. It is sad, but at the same time I wish him good luck.
"He is the best jockey in the world and I am sure he will do well also in the future."
Dettori, winner of 110 Group or Grade One races in the royal blue silks, thanked the many Godolphin staff who had helped him to achieve the success he has enjoyed with the stable.
"The whole team have been fantastic — none of it would have been possible without them," he said.
Godolphin's racing manager Simon Crisford admitted the retainer was no longer working.
He told www.godolphin.com: "We have had a tremendous association with Frankie over many years. He has achieved so much on behalf of Godolphin and has made the difference between winning and losing on so many occasions in the world's biggest races.
"However, Frankie is looking for a fresh challenge and we felt that the retainer was not really working, so this is the best way forward.
"We have had many great days together and we look forward to working with Frankie in the future and hopefully enjoying more success together.
"He remains a great friend — the difference next year will be that he will not be our retained jockey and will operate as a freelance instead."
Dettori's latest big-race success before the announcement of the split came on Joshua Tree, trained by fellow Newmarket-based Italian Marco Botti, in the Grade One Canadian International at Woodbine last Sunday.
Botti intends to make full use of Dettori's availability as a freelance next year.
He said: "He's definitely a top-class jockey. I'm sure we'll have the opportunity to use him next year on the right horses.
"It's always fantastic to have him on board and the ride he gave Joshua Tree I'm sure played a big part in that win."
Dettori's name has been one of a number linked as possibles to be named retained jockey to the increasingly powerful Pearl Bloodstock and Qatar Racing.
Asked about speculation over a retained rider, David Redvers, racing manager to Sheikh Fahad Al Thani of Qatar, said: "I think I will be in a position to make an announcement at the end of the week."