Iachini, 54, had steered four clubs out of the second tier but failed to steer Empoli away from danger in Serie A.
Empoli, who host Frosinone on Sunday, are one point above the drop zone in 17th place after only five wins in 27 matches.
"Empoli's most heartfelt and sincere thanks to the coach (Iachini) and his colleagues for the work done and the club wish them the best of luck for their sporting and professional future," Empoli said in a statement.
Iachini's final match was a 2-1 loss at AS Roma on Monday -- the hosts' first game under returning coach Claudio Ranieri.
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(The story fixes typo in first paragraph)
(Reporting by Silvia Recchimuzzi in Gdynia; Editing by Christian Radnedge and Ken Ferris)
