Chelsea have won just two of their last eight games in all competitions and have slipped to third in the premier league having enjoyed an unbeaten start to the 2012/13 campaign.
The news comes as the defence of the Champions League crown they won last year hangs by a thread following 3-0 defeat against Juventus in Turin last night.
That defeat means that Chelsea must win their final game against Nordsjaelland and hope for a favourable result between Shakhtar Dontesk and Juventus next month in order to avoid becoming the first defending champions to exit at the group stages in the Champions League-era
A statement on Chelsea’s official website read: “Chelsea Football Club has parted company this morning with Manager Roberto Di Matteo.
“The team's recent performances and results have not been good enough and the owner and the Board felt that a change was necessary now to keep the club moving in the right direction as we head into a vitally important part of the season.
"The club faces a difficult task ahead in qualifying for the knockout stages of the UEFA Champions League as well as maintaining a strong challenge for the top of the Premier League while competing in three other cup competitions. Our aim is to remain as competitive as possible and challenge strongly on all fronts.
It continued: "The owner and the Board would like to thank Roberto for all he has done for the club since taking over in March. Roberto helped guide us to an historic Champions League victory and a seventh FA Cup.we will never forget the huge contribution he has made to this club's history and he will always be welcome at Stamford Bridge.
"The club will be making an announcement shortly regarding a new first team manager."
Former caretaker coach Avram Grant and ex-Liverpool coach Rafa Benetiz have been tipped as interim replacements for Di Matteo, while Pep Guardiola has been linked with a move to Stamford Bridge when he ends his year-long sabbatical from the game at the end of the season.
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