According to a statement on the club's official website "Fenway Sports Group (FSG) and Liverpool Football Club announce that Kenny Dalglish is to leave his post today as Manager after having his contract terminated.
"After a careful and deliberative review of the season, the Club came to the decision that a change was appropriate. It is not a decision that was reached lightly or hastily.
"The search for a new Manager will begin immediately."
Dalgish, during a summit in Boston learnt of the club owner's frustration with his poor use of club resources in the transfer market. Citing the seven players he bought with £110 million, they claimed they didn't bring any impressive improvement to the club.
John Henry, Liverpool owner commended the outgoing manager.
"Kenny will always be more than a championship winning manager, more than a championship winning star player. He is in many ways the heart and soul of the club.
He personifies everything that is good about Liverpool Football Club. He has always put the club and its supporters first. Kenny will always be a part of the family at Anfield.
"Our job now is to identify and recruit the right person to take this club forward and build on the strong foundations put in place during the last 18 months."
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