"It's unfortunate we reached this decision, but after speaking to the surgeon and the medical staff at Manchester United I have been advised to retire from coaching," he told the club's official website.
"After two operations in four months which have been successful in terms of quality of life away from coaching, unfortunately, I will be unable to carry on coaching.
"I have had ten fantastic years and the experience and memories are what people dream about and I would like to thank everyone at Manchester United, especially the first team staff that I have been closely associated with over the last ten years.
"I can't go without saying what a pleasure it has been working for the best manager in the world, Sir Alex Ferguson, and I wish he and the team continued success."
Academy coach Richard Hartis will replace Coton for the remainder of the season.