The 45-year-old’s departure was confirmed by the Black Cats little more than 24 hours after a 3-0 defeat at West Brom left them rooted to the foot of the Premier League table.
A statement said: “Sunderland AFC confirms that it has parted company with head coach Paolo Di Canio this evening.”
Former Sunderland captain Kevin Ball, currently on the club’s coaching staff, steps in to lead the team on a short-term basis.
Sunderland’s statement added: “Kevin Ball will take charge of the squad ahead of Tuesday night’s Capital One Cup game against Peterborough United and an announcement will be made in due course regarding a permanent successor. The club would like to place on record its thanks to Paolo and his staff and wishes them well for the future.”
Di Canio arrived on Wearside amid a blaze of publicity in March as owner Ellis Short took a gamble on the former Swindon boss after deciding to end Martin O’Neill’s tenure.
It proved a controversial appointment as critics cited reports of his alleged fascist sympathies, prompting the club to make a stout defence of their new manager.
However, it was never likely to be dull as Di Canio embarked upon what proved a colourful six months in charge.
Speaking as he was unveiled, he said: “I am the unique one. I am joking, actually I’m not. I am at the beginning of my career.
“One day we will discover that I am either a fantastic, good or normal manager.”
On the pitch, he was handed the reins with just seven games of the 2012-13 season remaining and relegation a genuine possibility.
A 2-1 defeat at Chelsea in his first game was followed by a famous 3-0 derby victory at Newcastle in his second, and his knee-sliding celebrations at St James’ Park earned him a place in Sunderland folklore with his tenure still in its infancy.
A 1-0 home win over Everton next time out persuaded many more of the doubters that he was the real deal, but it proved to be a false dawn.
Sunderland came down to earth with a painful bump when they headed for struggling Aston Villa on April 29 and returned on the wrong end of a 6-1 hammering, and they eventually secured their top-flight status, if only just, by finishing in 17th place.
Di Canio rang the changes in the summer but Sunderland’s start to the season has been abysmal with the Blacks Cats picking up just a single point from five games.
Saturday’s defeat proved the final straw as goals from Stephane Sessegnon, Liam Ridgewell and Morgan Amalfitano condemned the Black Cats to a 3-0 defeat.
WEST BROM: Myhill, Jones, McAuley, Olsson, Ridgewell, Mulumbu, Morrison, Amalfitano, Sessegnon (Berahino 89), Sinclair (Yacob 69), Anelka (Anichebe 69).
SUNDERLAND: Westwood, Celustka, Diakite, O’Shea, Colback, Johnson, Gardner (Cattermole 69), Ki, Giaccherini (Mavrias 46), Fletcher, Borini (Altidore 59).
Referee: Phil Dowd (Staffordshire).