MacPhail is leaving the Orioles to tend to family and personal obligations, the source said.
UPDATE: The Orioles on Saturday announced MacPhail's departure in a news release. "On behalf of the Orioles organization, I thank Andy for his service to the club over the last four and a half seasons," Orioles owner Peter Angelos said in a statement. "Andy's knowledge and experience have helped lay the groundwork for our future success. I hold Andy in the highest regard and thank him for his commitment and dedication to the Orioles.
"And on a personal level, Andy is a dear friend. He will be greatly missed, and I wish him nothing but the best in his future endeavors."
Who will replace MacPhail is unknown, but the belief is that manager Buck Showalter, who many saw as the leading candidate, will stay in the dugout. Angelos and Showalter met Friday, but neither would comment on what was discussed.
UPDATE: A club source told The Baltimore Sun on Saturday that Showalter will remain Orioles manager in 2012.
MacPhail met with Angelos on Sept. 29, roughly 13 hours after the Orioles ended their 14th straight losing season with a ninth-inning, two-out, 4-3 comeback that essentially knocked divisional foe the Boston Red Sox from the playoffs.
It might have been the biggest win of the MacPhail era, which began June 20, 2007, days after he had a clandestine meeting with Angelos and was persuaded to take a post similar to the one that his Hall of Fame father, Lee, held with the Orioles from 1958 to 1965.
It was widely believed MacPhail had told Angelos earlier this year that he would be stepping down, but after last week's meeting, an announcement was delayed while Angelos attempted to work out a situation in which MacPhail would stay in the same role.
On Friday, MacPhail decided to end the delay and walk away from the post.
MacPhail, 58, brought steady professionalism and an impressive lineage to the Orioles, but he did little to improve their fate in the American League East. The club went 307-432 (.415 winning percentage) and finished last in each of his four full seasons and fourth in 2007.
When he took the position, MacPhail made a point that he would be the person who ultimately would be responsible for the club's successes or failures.
"I think it's important to have one voice," MacPhail said in his introductory news conference. "You're looking for all the help you can get, all the research you can get. But at the end of the day, it has to be clear who is responsible, who's accountable, for baseball operations."
There was a question as to whether MacPhail would be able to co-exist with Angelos, who in the past had a reputation of meddling with baseball operations. But the men worked together closely during the 2002 and 2006 labor negotiations and had already established a relationship before MacPhail took the Orioles' reins.
"I wouldn't be here unless I was absolutely confident that I was free to run this franchise the way it has to be run," MacPhail said when he was hired.
During his time in Baltimore, MacPhail consistently stated that he never felt like he had a lack of authority in baseball decisions, though he continually kept Angelos in the loop. In fact, there was at least one instance when Angelos pushed MacPhail to spend more money and go outside his comfort zone.
Last offseason, MacPhail and the representatives for likely Hall of Fame designated hitter Vladimir Guerrero had drawn a monetary line in the sand and were seemingly at a standstill when Angelos told MacPhail to spend what it would take to get the free agent. Guerrero signed a one-year, $8 million deal, which invigorated a fan base still floating from a 34-23 start to Showalter's tenure.
However, those guarded expectations came crashing down quickly, when the Orioles couldn't maintain a 6-1 start and plummeted to the AL East basement. MacPhail became the target of acrimonious fans because the organization's cadre of young pitching arms did not advance at the big league level and MacPhail's mantra for success was to "buy the bats and grow the arms."
Relying on young pitching is the riskiest endeavor in the sport, and when talented but green pitchers Brian Matusz, Chris Tillman, Jake Arrieta and Brad Bergesen were felled by injury or ineffectiveness, it torpedoed MacPhail's grand hope that 2011 would be the Orioles' first step toward respectability.