The 42-year-old, who joined Anfield in 2012, nearly guided Liverpool to the Premier League title in his second season at the club but eventually finished two points behind champions Manchester City.
Luis Suarez's departure and Daniel Sturridge's injury problems contributed to Liverpool's inconsistent form as they finished in sixth place last term, and Rodgers has now left Anfield after the team registered just three wins from their opening eight games.
Jurgen Klopp, who left Borussia Dortmund at the end of last season, is the early frontrunner to replace Rodgers, while Carlo Ancelotti is also being considered.
“We would like to place on record our sincere thanks to Brendan Rodgers for the significant contribution he has made to the club and express our gratitude for his hard work and commitment,” read a joint Fenway Sports Group statement from principal owner John W Henry, chairman Tom Werner and president Mike Gordon.
“All of us have experienced some wonderful moments with Brendan as manager and we are confident he will enjoy a long career in the game.
“Although this has been a difficult decision, we believe it provides us with the best opportunity for success on the pitch. Ambition and winning are at the heart of what we want to bring to Liverpool and we believe this change gives us the best opportunity to deliver it.
“The search for a new manager is underway and we hope to make an appointment in a decisive and timely manner.”
Rodgers returned Liverpool to the Champions League but endured a disappointing 2014-15 campaign, crashing out in the group stages of the competition, losing to Aston Villa in the FA Cup semi-final and finishing sixth in the Premier League.
Liverpool once again struggled this term, despite spending around £70 million in the summer, only winning one of their last six league games, against Villa, drawing against Bordeaux and Sion in the Europa League and being taken to penalties by Carlisle in the League Cup.
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