It was alleged that he struck defender Remie Streete after the club’s Under-21 defeat to Sunderland at the Stadium of Light.
Donachie had been suspended by United while the allegation was investigated.
The alleged incident was again brought into sharp focus last weekend by the actions of first-team manager Alan Pardew.
Pardew has been charged with improper conduct by the Football Association for aiming an apparent headbutt at Hull City’s David Meyler.
Willie Donachie: “What I try to teach the players is to be responsible for your actions – don’t try to blame anyone else.
“And so I’m going to go somewhere else to try to be a great coach.
“All I’ve had is a lot of support and people wishing me well.
“I want to say thank you to the people of Newcastle who have been very supportive, especially all my neighbours and a lot of people at the club.
“The Newcastle people are tough people, but they’ve got big hearts.
“They’re really the club – the fans.
“It’s a shame, I’ve been here four years now.
“My wife and youngest son lives here. We bought a house straight away.
“I’ve come to love the city and the area around it, but most importantly the people.
“Now I’ve got to go somewhere else, but that’s football. You can’t always stay in the one place.
“It’s a shame it’s happened like this.”
Alan Pardew: “It was an unfortunate situation.
“We’ve lost Willie, who is a fantastic coach. That’s a blow to us.”