Villa have failed to impress this season and finished just above the relegation zone.
A club statement read: “Aston Villa can confirm that Alex McLeish’s contract has been terminated with immediate effect. The club has been disappointed with this season’s results, performances and the general message these have sent to our fans.
“The board wishes to assure supporters that we are conscious in every sense that Villa expects and deserves more and we will strive to deliver this.”
Villa chairman Randy Lerner said: “We need to be clear and candid with ourselves and with supporters about what we have lacked in recent years.
“Compelling play and results that instil a sense of confidence that Villa is on the right track have been plainly absent.
“The most immediate action that we can take is to look carefully at our options in terms of bringing in a new manager who sees the club’s potential and embraces our collective expectations.”
Norwich boss Paul Lambert is the early favourite to be named as new Villa manager.
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Summer 2016 is set to be a very exciting time for football fans, as this is when the long awaited Euro 2016 tournament kicks off.
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