The former Australian Test leg spinner, who joined the county as second team captain and coach six years ago after all his success in the leagues, asked to be released this week.
And Chairman Jack Simmons granted his wish.
Sleep was known to be unhappy at being overlooked for the head coaching job when Dav Whatmore left for Sri Lanka midway through last season.
And Lancashire this week decided to advertise the job.
Meanwhile, Andy Flintoff is closer than ever to signing a new contract with Lancashire after Chief Executive Jim Cumbes held fresh talks with his agent Andrew Chandler last night.
Both parties are hopeful that a deal can be hammered out soon. And that means Flintoff could be part of an historic trip to Holland for Lancashire in next year's NatWest Trophy.
The NatWest draw was staged at Lord's last night and Lancashire were given a third round tie away to either Cheshire or Lincolnshire, who meet in the first round, or Holland, who enter the competition in the second round.
Holland would be tricky opponents.
They beat Durham this year with former Glamorgan veteran Roland Lefebvre especially difficult to play on the slow, seaming Amsterdan pitch, and then gave Kent a fright in the fourth round.
The tie will be played on June 29, with Lancashire's Board XI will play Suffolk away in the first round on May 2.
Converted for the new archive on 14 July 2000. Some images and formatting may have been lost in the conversion.
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