A club statement said: Graham has been a loyal servant to the club but has become a victim of circumstances.
Former City trialist Alexi Lalas now manager of MLS LA Galaxy has said that he would like to sign David Beckham if the former England captain fails to agree terms with Real Madrid about a new contract.
Brian Laws has been appointed manager of Sheffield Wednesday and will be in charge when the Owls travel to the Arena on November 18th.