Fondaco was unavailable for comment Saturday. Eyre was elected the city's mayor in November after longtime Mayor Dan Snarr stepped down.
Murray Assistant Police Chief Craig Burnett will act as the department's interim chief until a replacement is found.
Fondaco, 61, has been with the Murray Police Department for 35 years. He was promoted to sergeant in 1984 and became a lieutenant in 1993, according to a biography on the Murray Police Department's website. Fondaco was responsible for both the patrol and detective divisions before becoming chief in 2002. He is scheduled to retire, and his last day will be Friday, Eyre said.
"Chief Fondaco is a very profesional individual," Eyre said about how the chief reacted to the news early last week. "He realizes his position, along with any executive position, is at-will. He knows that comes with the position he held."
The Murray Police Department had 89 employees in 2012, which includes 76 full-time officers, according to the latest statistics from the Utah Bureau of Criminal Identification.
The city had a crime rate of 52.19 incidents per 1,000 people in 2012, down from 68.36 per 1,000 the year before, according to BCI's annual Crime in Utah Report.