Rayo Vallecano have sacked coach Michel after seven consecutive La Liga defeats left them second from bottom, six points from safety.
Michel, who enjoyed two spells at Rayo as a midfielder and is considered a club great, was appointed manager in 2017 after first coaching the youth team.
The 43-year-old led the club to Spain's top flight last season after winning the Segunda Division title.
"We thank him for his immeasurable work over the past three years and his unquestionable successes (including) promotion to La Liga in 2018," Rayo said in a statement on Monday.
Rayo have been linked with their former manager Paco Jemez in Spanish media reports as they bid to stay in the top flight.
A win at Alaves in January helped Rayo climb out of the relegation zone briefly, but defeats in every game since mean relegation looks increasingly likely.