"Granada announce that the coach Joaquin Caparros has been relieved of his duties as first-team trainer," the club, who are bottom of La Liga, said on their website (www.granadacf.es) on Friday.
Youth coach Joseba Aguado will take charge of the team for Sunday's game at champions Atletico Madrid while the club seek a replacement.
Abel Resino, a former Granada coach who has also managed Atletico, Levante and Celta Vigo, is favourite to take over, local media reported.
The experienced Caparros was appointed in May on a contract until the end of next season.
The 59-year-old has also had stints in charge at Spanish sides including Sevilla, Athletic Bilbao and Deportivo La Coruna.
(Reporting by Iain Rogers, editing by Ed Osmond)
