The 44-year-old spent 14 years at Turf Moor, making 383 appearances in 12 years as a player, before joining the coaching staff as Under 18s and then Under 23s manager.
He returned to Cheltenham, from who he joined Burnley after eight years at Whaddon Road, and took the Robins to the League Two play-off semi-finals in 2020, before claiming the club’s first automatic promotion in the EFL the following season, and being named League Two Manager of the Season.
Last season Duff led Cheltenham to 15th in League One, their highest league finish.
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Those achievements have raised eyebrows throughout the EFL, and, after speaking to Championship club Blackpool over their vacant managerial post, he is expected to take the reins at LeagueOne Barnsley.
Cheltenham Town chairman David Bloxham said on the club website: “Obviously it’s a disappointing day for Cheltenham Town as Michael has done such a tremendous job for us, but he leaves with our very best wishes for the future.
“Michael made it clear to us that it was a very difficult decision for him.
"We did all we could to try and keep him at the club but ultimately this new opportunity is one that he feels it right for him at this stage of his career.
“I know it would not have been an easy decision to arrive at because Michael has built up a very special bond with our club and his family all live locally, so it will be a big wrench for him to leave but as an ambitious young manager, we completely respect his decision.”