The Spaniard had signed a short-term deal which was set to run until 12 January but it has been terminated after just over two months at Cappielow.
He was signed by former manager Allan Moore in an attempt to revive the club's ailing season.
However, things have not worked as planned, with the 34-year-old netting just once in 10 appearances.
In his first match in charge against Falkirk on Saturday, new boss Kenny Shiels listed the former Dundee and Rangers frontman as a substitute.
Despite losing 2-0 to the Bairns, Novo remained on the bench while fellow forwards Aidan Ferris and Archie Campbell were introduced to play.
Shiels is expected to use the freed-up funds to bring in a replacement, with ex-Hibs striker Garry O'Connor, who recently trained with Ton, a likely target.
Skipper McLaughlin, who joined his local club in the summer of 2012, is also moving on.
He said: "I would personally like to thank everyone at the club for their support over the past year and a half, along with the fans, who have been fantastic. It’s disappointing not to get a chance under the new manager but l wish the club and players all the success going forward in the Championship.”
Ton boss Shiels said: "As a club we are trying to move forward and l greatly appreciate the effort these players have put in to date and wish them every success in the future.”