The club has informed Gray that his contract will not be renewed and he has now left his post with immediate effect.
York shared a 1-1 home draw with Curzon Ashton yesterday and have seven points from the opening five games.
The club's Board of Directors have thanked Gray for his services and wishes him all the best for the future.
The Board of Directors provided Gray with all the necessary financial support to re-build his squad this summer after the team had missed out on last season's promotion play-offs.
Regrettably, it is felt that a change is now needed.
Assistant-manager Sean Gregan is also leaving with immediate effect.
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