Walsh, who joined West Coast in 2009, intends to return to South Australia, where he had lived for a decade before moving to Perth.
West Coast coach John Worsfold, who is keen to stay at the helm for at least two more years, said Walsh told him of his plans two weeks ago.
"He played an important role in evolving our game plan and worked very closely with the players in developing our system," Worsfold said.
"Phil told me a couple of weeks ago of his intention to return to South Australia, I wish him well for whatever the future holds."
Meanwhile, Fremantle development coaches Ashley Prescott and Steve Grace will both leave the Dockers when their contracts expire at the end of October.
Prescott, a former Docker and Tiger, joined Fremantle for the 2011 season following a stint at Essendon as an assistant. He is leaving the club to pursue other opportunities.
Grace coached the Oakleigh Chargers in the TAC Cup in 2009-10 and will return to Melbourne after three seasons at the Dockers.
