Watford manager Marco Silva has been sacked following a run of poor results, with the club apparently unhappy at Everton's pursuit of him earlier in the season.
The Hornets were as high as fourth in the Premier League table in October but have won just once in their last 11 top-flight matches.
They remain in 10th place but are just five points above the relegation zone after they lost 2-0 away to Leicester on Saturday, with former Malaga and Rubin Kazan manager Javi Gracia expected to take over at Vicarage Road.
The 40-year-old Portuguese was linked with the Everton manager's job before Sam Allardyce took over and Sky sources understand their majority shareholder Farhad Moshiri approached Watford owner Gino Pizzo in person after the Toffees' 3-2 win at Goodison Park in November to ask permission to talk to Silva about becoming their new manager.
That was refused and Watford confirmed in a statement that an "unwarranted approach" was key to their decision to sack Silva - Sky sources understand he was called to the training ground on Sunday morning before being given the news by CEO, Scott Duxbury.
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Silva is believed to have wanted to join Everton, meaning trust with the board and the players was severely damaged, with Watford hinting that the link to the Toffees was the "catalyst" for the decision to sack him.
"Watford Football Club has parted company with Marco Silva," read a statement on the club's official website.
"This has been a difficult decision and one not taken lightly. The club is convinced the appointment of Silva was the right one and had it not been for the unwarranted approach by a Premier League rival for his services, we would have continued to prosper under his leadership.
"The catalyst for this decision is that unwarranted approach, something which the board believes has seen a significant deterioration in both focus and results to the point where the long-term future of Watford FC has been jeopardised.
"For the security and success of the football club, the board believes it has to make a change.
"The club will seek to make a swift appointment and there will be no further comment until that appointment has been made."
Watford were the sixth highest Premier League spenders in the summer and had targeted a top-eight finish, having assembled their most expensive squad.
Of particular concern to the club was the number of games surrendered from winning positions, particularly the two late goals they conceded to lose 2-1 at home to Swansea on December 30, having led since the 11th minute when Andre Carrillo scored the opener.