The former Scotland international stepped in to take charge of the Magpies academy side on August 16 after Chris Hogg left to join English League One side MK Dons as assistant manager.
Caldwell came through the academy set-up at St. James Park but failed to make a first team breakthrough.
He went on to forge an impressive playing career, enjoying successful spells at Hibernian, Celtic and Wigan Athletic before stepping into management.
The 39-year-old had been out of work after he was sacked by Partick Thistle in September 2019, with the Glasgow club sitting second-bottom of the Scottish Championship table.
Caldwell announced on Twitter his time with the Premier League outfit had come to an end – but it appears he won’t be out of the game for long.
He stated: “Enjoyed immensely being back on the grass coaching at the club that gave me my start in football. Thank you to all the players and staff for making me feel so welcome…
“Wish you and all the Newcastle fans the best of luck for the rest of the season. A fantastic football club. Looking forward now to my next challenge in the game which I will announce in the next few weeks.”
A club statement read: “Caldwell stepped in on a short-term basis last month following the departure of Chris Hogg, and leaves with the recruitment process to appoint Hogg’s full-time successor nearing completion.
“Current assistant Kevin Richardson will take the team for its upcoming fixtures ahead of a permanent appointment being announced shortly.
“The club would like to thank Gary for his contribution and wishes him well for the future.”
Newcastle’s Under-23 side are currently top of the Premier League 2 following their unbeaten start to the season, drawing with Reading before securing back-to-back wins over Birmingham City and Burnley.