The former dual code international had originally committed to the Aviva Premiership outfit after being approached by Lancaster to become a permanent part of the England set-up in April.
But Farrell has now gone back on his decision and opted to leave the club, just six weeks after rejecting a long-term role with the national team.
A statement from Saracens read: “We are sorry to see Andy leave, and wish him well in the future.”
Farrell joined the England set-up as part of the Six Nations coaching team and made a big impression on Lancaster, but had said he wanted to stay with Saracens.
His shock departure from the top flight club will now open the door for Farrell to join the England backroom staff.
But the 37-year-old will need to secure release from a six-month notice period before he can link up with Lancaster’s team.
It was originally thought that Farrell would join the England party for their tour of South Africa but Lancaster has now said that is not the case.
“I want to categorically confirm he won’t be joining us out here as part of the coaching team,” said Lancaster.
“I always said that I would look at my coaching team at the end of this tour.”
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