Borussia Dortmund have sacked head coach Lucien Favre after their 5-1 home defeat to Stuttgart.
The 63-year-old was informed of the decision on Saturday evening, after the heavy loss against the Bundesliga new boys which left Dortmund five points behind Bundesliga leaders Bayern Munich.
Favre, who took charge at Dortmund after leaving French club Nice in July 2018, had led the club to the last 16 of the Champions League as group winners.
Assistant coach Edin Terzic will take charge of Dortmund until the end of the season on an interim basis and will lead the club for the first time against Werder Bremen in the Bundesliga on Tuesday.
Michael Zorc, Dortmund's sporting director, said the club's board came to the unanimous decision due to the "great risk" to the team's targets for the season.
Dortmund chief executive Hans-Joachim Watzke said: "We are all grateful to Lucien Favre for the superb job he has done over the last two-and-a-half years, achieving two runner-up finishes with his team.
"As a professional and as a person, Lucien Favre is beyond reproach."
Favre's contract at Dortmund was set to expire at the end of the season but his early exit left him frustrated as he knew he could have done more with his set of players.
"I think it's a shame that we are going separate ways here. We had two very successful years," Favre told German press agency DPA. "We have a team that would have had a successful season this year. I am still convinced of that."
Speaking after the game on Saturday, the Swiss said: "It was bad. We weren't good at winning the ball. We made too many big mistakes. It's hard to explain. If you're not good at winning the ball, and I mean the whole team, then you have a problem."
Favre, who previously worked at Hertha Berlin and Borussia Monchengladbach in the Bundesliga, leaves the club alongside his assistant Manfred Stefes.
Dortmund, who finished second last season, have won only one of their past five games in the German top flight.
The club have lost six of their eight games at home without fans, while they had lost just one in 32 at home under Favre with fans in the stands.