Yates was supposed to take charge until the end of the season after stepping in after the dismissal of Neil MacFarlane.
But with two games to go chairman Colin Gordon says the former Cheltenham and Macclesfield manager isn’t going to be taking the job full-time.
Barriers are unlikely to make the National League North play-offs after Good Friday’s home defeat to Leamington.
Therefore it has been decided the relationship will come to an early end.
A statement read: “Harriers can confirm that Jimmy O’Connor is to take charge of the team for the season’s remaining two matches.
“Chairman Colin Gordon met with Mark Yates on Sunday to discuss matters.
“At that time it was felt that, as Mark would no longer be considered for the position of Manager long-term, it would serve no benefit to either party to continue with the current arrangement.
“We wish Mark well for the future and thank him for his efforts over the last few months.
“O’Connor will be assisted by Russ Penn for the games against Southport and Guiselely, while the club continues the process of identifying the next manager.”