The Portuguese champions made the announcement in a statement to the Portuguese Securities Market Commission and it appears to pave the way for Villas-Boas to join Chelsea.
The west London club are searching for a coach to replace Carlo Ancelotti, who was sacked at the end of last season.
The statement read: "FC Porto was today notified of the intention of Andre Villas-Boas to resign from his contract with the club by triggering the release clause immediately.
"The contract will be terminated once the required amount is paid."
Villas-Boas guided the Dragons to the domestic double and Europa League success last season.
And he is no stranger to Chelsea, having worked there under Jose Mourinho.
Source: PA
Source: PA