Michel, 65, lost two friendly matches in a brief tenure, before declined to go with the Kenya team to the regional East and Central African Senior Challenge Cup in Uganda this month where they finished runners-up.
His first game in charge was a 2-1 home defeat by Bafana Bafana in Nairobi in October.
“I could not find an amicable agreement regarding my compliance with several provision of my contract,” he said in a statement.
It ends yet another national team job for the widely travelled Michel, who has coached in 12 different countries since leaving his job with the French national team in 1988.
The Frenchman has coached at four World Cups with four different teams – France in 1986, Cameroon in 1994, Morocco in 1998 and the Ivory Coast in 2006.
He has also been the national team coach of the United Arab Emirates and Tunisia.
Kenya have named James Nandwa as his replacement.