David DeCamp, Brown's spokesman, said Monday evening that the departure was mutually agreed upon and that a resignation letter is expected soon.
A Gator Bowl Sports news conference is scheduled for 1:30 p.m. Wednesday to announce a new hire that will become chief operating office of the events and entertainment division.
It will be the first executive hired to run the division.
Verlander was appointed by Mayor Alvin Brown in April 2012 to the lead the city's efforts to lure sports and entertainment events and build Jacksonville's profile.
Verlander will join the private organization soon.
He was unavailable for comment Tuesday morning.
The city will announce an interim director in the coming days and will hire a permanent replacement, DeCamp said.
He said that under Verlander's leadership, the city was able to secure events such as soccer and tennis matches, track and field meets and Florida Country Superfest, while continuing longstanding events like the annual Florida-Georgia game.
"This Gator Bowl organization is creating an entity that we can partner with to fulfill the mayor's goal of bringing in sports
and entertainment," DeCamp said.
Announced in early November, Gator Bowl Sports branches off from the former Gator Bowl Association's mission of providing "the very best in college athletics."
The organization still will attempt to bring the highest economic impact to the area, but the nonprofit is no longer restrained to college athletics and will work to attract professional and nonsporting events to the city, using its private sponsors as resources.
Before joining the City, Verlander was athletic director at Jacksonville University.
City Sports and Entertainment Director Alan Verlander will leave his job to take a leadership position within Gator Bowl Sports, which is the expanded and rebranded Gator Bowl Association.