The Italian, who took over from Martin O'Neill in March, has paid the price for a poor start to the campaign, in which the Black Cats are yet to win a match.
Pressure mounted following yesterday's 3-0 defeat to West Bromwich Albion and reports suggested that he had two more games to save his job.
However, the club have released a statement this evening announcing that they have parted company with the 45-year-old, and named Kevin Ball as his temporary successor.
"Sunderland AFC confirms that it has parted company with head coach Paolo Di Canio this evening," read the statement on the club's website.
"The club would like to place on record its thanks to Paolo and his staff and wishes them well for the future."
Di Canio brought in 14 players during the summer transfer window.
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