The decision to terminate his contract came following a board meeting with new owner Massimo Cellino.
The 53-year old took over the managerial reigns at Leeds in April 2013 following the departure of then manager Neil Warnock.
During his time at the club he managed in 54 league games with a win, loss, draw record of 20/9/25 (37% win rate) which is not the best record.
Due to his sides drop in form and club reshuffle he has left the club and current owner Cellino will start the search for his replacement later on today.
Various media outlets in Italy are suggesting that various members of staff at Serie A side Cagliari will follow their former boss to the Championship side although nothing has been confirmed as of yet.
It is though believed that an Italian manager will be appointed.
For the full club statement click here.