"The Levante board of directors ... has decided to dispense with the services of coach Lucas Alcaraz and his team," the club said on their website (www.levanteud.com).
Levante president Kiko Catalan said an announcement would be made in coming days on a successor.
Alcaraz is the second coach to be dismissed in Spain's top flight this season after Las Palmas, who like Levante have only six points from nine games, sacked Paco Herrera last week.
Levante have outperformed for a club with limited resources in recent years and finished sixth in 2011-12 and qualified for the Europa League.
They flirted with relegation last season in their fifth consecutive top-flight campaign and will need a swift improvement if they are to avoid the drop this term.
Alcaraz, who has also coached teams including Granada, Almeria, Cordoba and Aris Salonika of Greece, took over at Levante in October last year.
(Reporting by Iain Rogers, editing by Sudipto Ganguly)
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