The 66-year-old Chilean was given his marching orders after West Ham’s 2-1 home loss to Leicester City left the side in 17th spot on the English Premier League table, only one point above the drop zone.
The Hammers have lost seven of their past nine league matches, only managing two wins during that stretch. They’ve also lost their past four home matches.
The former Manchester City manager completed his post-game media conference, before West Ham made the announcement on Saturday night.
“It is with great disappointment that we’ve had to make this decision,” West Ham joint-chairman David Sullivan said.
“Manuel is a gentleman and it has been a real pleasure to work with someone of his calibre.
“However, it has become clear that that a change is required to get the club back on track in line with our ambitions this season.
“We felt it was necessary to act now in order to give the new manager as much time as possible to try and achieve that.”
Pellegrini, who has previously managed City along with Real Madrid, becomes the sixth manager dismissed this English Premier League season.
Watford and Everton have both enjoyed a recent upswing in form following managerial changes, along with Tottenham under Jose Mourinho.
Pellegrini had led the Irons to 10th spot last season after taking over in May 2018.