Chambliss, 63, was the first member of Wedge's staff to not have his contract renewed since the group started together in 2011.
"We will begin an immediate search for a new hitting coach," general manager Jack Zduriencik said. "On behalf of the Mariners organization, I want to thank Chris for all of his hard work and dedication over the past two seasons."
The rest of the staff will return next season, with Carl Willis as pitching coach, Robby Thompson as bench coach and infield coach, Mike Brumley as first-base coach and outfield and baserunning coach, Jeff Datz as third-base coach and catching coach, Jaime Navarro as bulllpen coach and Jason Phillips as bullpen catcher.
"As we go through the process of getting this team where we want it to be, the coaches are a big part of it," Wedge said. "We are all already at work getting ready for the 2013 season with meetings today, and the coaches and staff will be in contact with our players all winter. I too want to thank Chris for his efforts the past two seasons."
The Mariners saw some offensive improvement this season as they went 75-87, an eight-win gain from 2011, but still finished last in the AL in scoring, batting average, on-base percentage and slugging percentage.
Several Seattle hitters took strong steps forward this year, led by young third baseman Kyle Seager and outfielder Michael Saunders, but other young hitters like Dustin Ackley, Jesus Montero and Justin Smoak didn't have the kind of years expected offensively.
Jeff Pentland, the team's Triple-A hitting coach in Tacoma, joined the team for the final month and worked with Chambliss and the hitters during that time.
Chambliss has spent 15 years in the Majors as a hitting coach, having previously worked with the Yankees, Cardinals, Mets and Reds. He also spent 17 seasons as a Major League player with the Indians, Yankees and Braves from 1971-88.