City announced in a statement on Wednesday that former Socceroos captain Vidmar would take the reins until the end of the current campaign.
Vidosic was moved from coaching City's A-League Women side into the men's hot-seat in November last year when Patrick Kisnorbo left to join French outfit Troyes. He was then appointed on a permanent basis in February.
Former technical director Vidosic -- who also won silverware with the club's A-League Women side -- managed City's men for 25 league games (12 wins, seven draws, six losses).
"We are immensely grateful to Rado for his contributions to Melbourne City over the past five years," the club's CEO Brad Rowse said in a statement.
"From our men's and women's teams to our youth academy, Rado's impact has been significant. We wish him the very best in his future endeavours."
A massive offseason overhaul in personnel -- with Marco Tilio (Celtic), Aiden O'Neill (Standard Liege), Jordy Bos (KVC Westerlo) and Tom Glover (Middlesbrough) among the high-profile departures -- didn't help City's start to 2023-24. The club's new signings are yet to gel, with City exiting the Australia Cup in the semifinals as they juggled the start of the A-League Men season with an Asian Champions League campaign. But Sunday's unacceptable heavy loss to Adelaide clearly forced City's hand.
Vidmar will take charge for City's Friday meeting with Sydney FC at AAMI Park. The former Socceroos captain led Adelaide United for 73 league games between 2007 and 2010 (25W-21D-27L).
He was Ange Postecoglou's assistant with the Socceroos in the national side's Asian Cup triumph in 2015 and has also coached Australia's youth teams. Vidmar's most recent coaching post was with Thai League 1 club Bangkok United in 2022.
"In Aurelio we have someone whose credentials speak for themselves and who is also committed to playing an attacking, possession-based brand of football that aligns with our own football philosophy," football director Michael Petrillo said.
Vidosic's assistants Petr Kratky and former club captain Scott Jamieson remain in their roles.