The Australian, who has turned the Phoenix around since taking over from Darije Kalezic in May last year, will walk away halfway through his two-year deal - despite the club's best efforts to retain him.
The New Zealand Herald understands Rudan has been unwilling to discuss the situation with the club over the last month and has recently informed them that he is leaving.
Rudan's future has been the subject of much speculation since the start of this year, as he has struggled with being isolated from his Sydney-based family.
Since January, the Phoenix have been trying to put together a package to convince Rudan to stay, driven by chairman Rob Morrison, but they've been unsuccessful.
Living closer to his wife and teenage children is believed to be a key driver of Rudan's decision to return to Australia, though the 43-year-old has also been frustrated with the financial resourcing of the club, and has spoken publicly on several occasions about the need for the Welnix ownership group to display more ambition.
Phoenix CEO David Dome was unavailable for comment when contacted by the Herald on Friday.
Rudan refused an interview request, telling the Herald he wouldn't "be doing anything this week", as he was fully focused on the clash with the Brisbane Roar on Friday night.
The confirmation of his exit marks the end of a short but highly successful era.
From the first day he walked through the doors Rudan has shaken up the club, from the playing group to the back office staff, bringing confidence and belief back into the organisation, after the Phoenix's reputation, off and on the field, nosedived dramatically during the Kalezic reign.
He has helped several players to produce the best football of their careers, especially young Kiwis like Alex Rufer, Louis Fenton, Sarpreet Singh and Liberato Cacace.
His methods have also driven striker Roy Krishna to enjoy a stunning season, and former Socceroo David Williams is another who has responded positively to the environment under Rudan.
The former Sydney FC captain has engendered a unified, successful playing group, with a positive, attacking style and the recipe has worked.
The Phoenix are all but qualified for the finals for just the fifth time in their history, and could surpass their highest regular season points tally (42 in 2014-15).
Four more goals in the last three regular season games will also mark a new goals record for the club.
The team enjoyed a nine-game unbeaten run from the beginning of December to late January, smashing the previous best streak of six.
Such success has brought back the fans, highlighted by more than 23,000 coming to Eden Park in February, a new club high for a non-finals match.
However, Rudan's departure means the franchise will be on the search again for a new head coach, and will bring another period of uncertainty and upheaval for the capital team.
Since Ernie Merrick's exit in December 2016, Des Buckingham, Kalezic, Chris Greenacre (caretaker) and Rudan have occupied the position.
