But they have lost eight of their last nine and sunk to 14th in the table as well as being knocked out of the FA Cup at the first hurdle by Bolton Wanderers.
Ince's departure was confirmed on the club's website (www.blackpoolfc.co.uk) and his assistants Alex Rae and Steve Thompson are also leaving.
Midfielder Barry Ferguson will take charge of training when the players return on Thursday, the club said in a statement.
Ince, whose son Tom plays for the club, was given a five-match stadium ban by the English FA in October for violence towards a match official.
He won only 12 out of 42 games at Blackpool who are now looking for their fourth full-time manager since being relegated after one season in the Premier League in 2010-11.
Ince, who represented England 53 times between 1992 and 2000, played for West Ham United, Manchester United, Inter Milan and Liverpool during a distinguished career.
He has also managed Macclesfield Town, MK Dons, Blackburn Rovers and Notts County.
(Reporting by Mike Collett, editing by Ed Osmond)
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