"Fluff and I have discussed this over the past few weeks and we both feel it is in our best interest to part ways," Woods said in a statement issued through his agent.
Woods said he appreciated the support which Fluff provided and recognised the contributions he made, "but it is time to move on".
Cowan had been Woods' caddie since the three-time US Amateur champion turned professional in August 1996. Together, they won seven PGA Tour events, including the 1997 Masters.
The caddie change followed reports of a rift between Cowan and Woods, who had turned to high school friend Byron Bell to carry his bag during a victory at San Diego last month and at the recent World Match Play Championship.
At the time Woods explained Cowan's absence by saying that Bell needed to earn some money for medical school.
Golf World magazine, however, had reported that Woods and Cowan had a verbal altercation at the Los Angeles Nissan Open and that Woods was upset that Cowan, in a recent Golf Digest article, had revealed the pair's financial arrangement.
Williams was hired after Woods' coach, Butch Harmon, discussed the possibility with Floyd. After getting Floyd's approval, Harmon talked to Williams, then Woods talked to both Floyd and Williams before making it official.Reuse content