Chelsea sacked head coach Graham Potter on Sunday after less than seven months in charge.
Chelsea fell into the bottom half of the Premier League following Saturday's 2-0 home defeat to Aston Villa, Potter's 11th defeat in 31 games since replacing Thomas Tuchel in September.
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It was confirmed that Bruno Saltor, a coach who left Brighton with Potter to join Chelsea upon his appointment, will take charge of the team as interim head coach.
In a statement, co-controlling owners Todd Boehly and Behdad Eghbali said: "On behalf of everyone at the club, we want to thank Graham sincerely for his contribution to Chelsea.
"We have the highest degree of respect for Graham as a coach and as a person. He has always conducted himself with professionalism and integrity and we are all disappointed in this outcome.
"Along with our incredible fans, we will all be getting behind Bruno and the team as we focus on the rest of the season. We have 10 Premier League games remaining and a Champions League quarter-final ahead. We will put every effort and commitment into every one of those games so that we can end the season on a high."
Sources have told ESPN that the decision to remove Potter was taken by the club's sporting directors Paul Winstanley and Laurence Stewart, but with the full backing of the board.
Potter was told of the news in face-to-face talks at the club's Cobham training base on Sunday and sources have said that a compromise was reached over his payoff, meaning he will receive less than the full value of his contract in severance terms.
Saturday's loss to Villa left Chelsea 11th in the league with a negative goal difference after another chastening evening during which fans at Stamford Bridge chanted "You don't know what you're doing" at Potter.
Potter had been under pressure for some time given results had suffered despite the new owners spending more than £550m on new players since completing their takeover of the club last May. That includes breaking the British transfer record to sign midfielder Enzo Fernandez from Benfica for £106.8m just two months ago.
Chelsea host Liverpool on Tuesday and face Real Madrid in their Champions League quarterfinal tie later this month.
Sources have told ESPN that senior figures at the club admire Julian Nagelsmann, who was sacked by Bayern Munich on March 24, but Chelsea are not yet advanced in identifying a permanent replacement for Potter.
Sources said Boehly and Eghbali had been determined to back Potter despite the club's slump in form but felt they had to act with Chelsea lying 12 points off the Champions League qualification places.
Potter signed a five-year deal to replace Tuchel, with Chelsea paying his £21m buyout clause to release him from Brighton.
He departs having won just seven of his 22 league games and registered an overall win rate of just 39%, the lowest of any permanent Chelsea manager this century.
Potter, 47, previously described his position as "the toughest job in football," citing the upheaval at all levels of the club following British government sanctions on former owner Roman Abramovich for alleged ties to Russia President Vladimir Putin, which triggered the club's sale last year.