The former Warrington Rylands first-team coach took up the reins of the Greens in December 2023, replacing the outgoing Wayne Goodison and Paul Bowyer.
In his 11 games in charge of the club, they have lost eight and drawn three, leaving 1874 at the bottom of the Northern Premier League West Division.
In a statement regarding Crossley's departure, 1874 Northwich said: "1874 Northwich wishes to announce that following very amicable discussions with Damian, it has been decided to release him from his duties.
"There is no doubt Damo has worked extremely hard for the club and has done so with a lot of energy and passion in what have been difficult circumstances.
"He leaves us with our greatest respect and sincere thanks. He is a thoroughly good guy who we have all enjoyed working with.
"The Board will issue further communications in due course."
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