The actress, who first appeared in the Channel 4 soap in September 1996, confirmed the news on Twitter.
"For those of you asking yes I have left Hollyoaks again & I'm now concentrating on exciting new projects," she wrote, thanking fans for their support.
Dunn returned to the Chester serial late last year on a one-year contract. Jamie Lomas, who plays scheming Warren Fox, signed a similar deal and revealed in August that he had decided to bow out.
The character of Mandy was best known for her turbulent marriage to Tony Hutchinson (Nick Pickard) and a brave stand against her abusive father.
In 2002, Dunn won the British Soap Award for 'Most Spectactular Scene Of The Year' for Adam Morgan (David Brown) and Mandy's car crash.