/**
 * Set the opacity CSS for required element
 */
	function setOpacity(elem,level) {
		//if filters then IE
		//use alpha opacity
		if (elem.filters) {
			elem.style.filter = 'alpha(opacity=' + level + ')';	
		} else {
		//else use W3C opacity CSS
			elem.style.opacity = level / 100;	
		}	
	}
	
	/**
	 * Fade out the required element over time using CSS
	 */
	function fadeOut(elem) {
		//20 frame animation
		for ( var i = 0; i < 100; i += 5 ) {
			//anonymous closure makes sure correct i is used
			//for each iteration
			(function(){
				//opacity is i
				var opacity = i;
				//animation
				setTimeout(function(){
					// Set the new opacity of the element
					setOpacity( elem, 100 - opacity );
					//completely hide the element at 95%
					if ( opacity == 95 )
                    	elem.style.display = 'none';
				//for smooth animation change the timeout delay 
				//proportionately with opacity
				}, ( i + 1 ) * 10 );
				
			})();
		}
	}
	
	//get id of element that closes element
	var myElm = document.getElementById('myElement');
	
	//close the element on click
	myElm.onclick = function() {
		fadeOut(document.getElementById('fadeOutElement'));
	};

/**
	 * Set the opacity CSS for required element
	 */
	function setOpacity(elem,level) {
		//if filters then IE
		//use alpha opacity
		if (elem.filters) {
			elem.style.filter = 'alpha(opacity=' + level + ')';	
		} else {
		//else use W3C opacity CSS
			elem.style.opacity = level / 100;	
		}	
	}
	
	/**
	 * Fade out the required element over time using CSS
	 */
	function fadeOut(elem) {
		//20 frame animation
		for ( var i = 0; i < 100; i += 5 ) {
			//anonymous closure makes sure correct i is used
			//for each iteration
			(function(){
				//opacity is i
				var opacity = i;
				//animation
				setTimeout(function(){
					// Set the new opacity of the element
					setOpacity( elem, 100 - opacity );
					//completely hide the element at 95%
					if ( opacity == 95 )
                    	elem.style.display = 'none';
				//for smooth animation change the timeout delay 
				//proportionately with opacity
				}, ( i + 1 ) * 10 );
				
			})();
		}
	}
	
	//get id of element that closes element
	var myElm = document.getElementById('myElement');
	
	//close the element on click
	myElm.onclick = function() {
		fadeOut(document.getElementById('fadeOutElement'));
	};

Smoothness of fade out animation needs work

Fadeout DOM element

css

JavaScript