The 44-year-old was initially appointed as caretaker manager and he led the club to the League One play-offs two years in a row, resulting in Charlton’s promotion to the Championship in 2019.
They were relegated last season, though, and have been struggling for form in League One this season, with Bowyer leaving with Charlton sat eighth in the table.
Charlton owner Thomas Sandgaard said: “I would like to thank Lee for everything he has done for Charlton. I have enjoyed working with him and wish him the best for his future. Our focus now is on finding the correct replacement to take this club forward.”
Bowyer added: “It was a difficult decision to leave. Everyone knows how I feel about the club. I could have gone before but I felt it was the right thing to do to stay and help the club through the tough times we’ve been through.
“We had some amazing times and some tough times. It has been emotional leaving. I’d like to thank all the players that I’ve worked with and the staff for the hours and hours of hard work that they did. I also want to thank the supporters. We wouldn’t have had those great memories without them.
“The club is now in a place with a good owner that cares and wants to improve the place and I hope the club can continue to grow. It will always hold a special place in my heart.”
Bowyer is set to take charge of Birmingham, where he spent two years as a player between 2009 and 2011, winning the League Cup there in 2011 when they beat Arsenal at Wembley.
The Blues are currently 21st in the Championship and battling to stay up after sacking manager Aitor Karanka on Sunday.