Panamanian Yau, 24, had been diagnosed with a long term injury which would have kept him out for the rest of the season, but he was already struggling for game time since the arrival of Richard Garcia.
Yau will leave the club immediately and create a visa space for Sydney to replace him with 29 year old midfielder Dimitrijevic.
Dimitrijevic has played for Nantes, Grenoble and Red Star Belgrade previously but was reportedly close to retiring until Sky Blues defender Nikola Petkovic helped bring him to Australia.
He has not played since leaving Belgrade in April but trained with Sydney last week and passed a medical over the weekend.
Now Yau has exited the club, Dimitrijevic is expected to be confirmed as a new signing imminently.
Sydney coach Fran Farina paid tribute to Yau today for his 27 game service to the club, scoring six goals along the way.
“Yairo has given great service to Sydney FC over the last 19 months and has become a firm fan favourite," said Farina.
“We wish him a speedy recovery and all the best for his future career.”
The attacker, who was first signed by the Sky Blues in July 2012, has praised the backing he has received while in Sydney.
“Thank you for the support to the people at the club and the fans, especially The Cove,” he said. “This was the best decision for me and the club to allow me to recover from my injury.
“I wish all the best to the club and to the team and I hope they go on and make the Hyundai A-League Finals.”