McClaren's position has been under threat for weeks and the Premier League club's fans turned on him during the 3-1 home defeat by Bournemouth on Saturday.
"After the defeat to Bournemouth the Club has spent some time considering its position and today concluded that Steve McClaren's employment with the Club will end with immediate effect," Newcastle said in a statement.
McClaren, 54, a former England manager, signed a three-year contract to become Newcastle boss in June and was appointed to the club's board of directors.
But his team have never recovered from a poor start to the season in which they failed to win any of their opening eight league matches.
They are 19th in the 20-team standings and are facing a return to the second tier for the first time since 2010.
"We acknowledge that reaching this decision has taken a number of days and that this has caused uncertainty for everyone involved, in particular for Steve and the players, for which we apologise," Newcastle said.
"However, we felt that this time was necessary to ensure the right decisions were reached with the best interests of the Club at heart."
Newcastle managing director Lee Charnley thanked McClaren for his contribution.
"He is a man of integrity and class and he has conducted himself with great dignity during this difficult time," he said.
"Steve worked tirelessly to try and bring success to Newcastle United. He has the utmost respect of all the players, staff and management and he leaves with our very best wishes and sincere thanks.
"We feel that a change is now needed in order to give the Club the best possible chance of securing its Premier League future."
Former Real Madrid and Liverpool manager Rafa Benitez has been lined up as McClaren's replacement in time for Monday's match against league leaders Leicester City, British and Spanish media reported.
Newcastle have some of the most passionate supporters in the country and St James' Park is the third biggest stadium in the Premier League with a 52,000 capacity, behind only Manchester United's Old Trafford and Arsenal's Emirates Stadium.
Disgruntled fans published an open letter on Monday.
"What Newcastle fans want is a team of 11 players in black and white shirts that understand their role to perform to their maximum -- week in, week out," the NUFC Fans' Forum said.
The team have under-achieved for decades with their last major domestic honour coming in 1955 when they won the FA Cup for the sixth time.
The club's last silverware came in 1969 when they won the old European Fairs Cup, a fore-runner of the Europa League.
(Editing by Ed Osmond)
Share
