His departure follows the team finishing 15th in the Premier League last season and currently sitting sixth, having missed out on Champions League qualification.
Darren Fletcher, the Under-18s coach, will take interim charge for the upcoming match against Burnley.
The search for a new permanent manager has begun, with former Chelsea boss Enzo Maresca, Crystal Palace's Oliver Glasner, and Barcelona legend Xavi Hernandez identified as leading candidates.
Other potential contenders for the Old Trafford role include Michael Carrick, Laurent Blanc, Ruud van Nistelrooy, and Gareth Southgate.