Portuguese Nuno, 41, took over in July 2014 with the strong backing of billionaire owner Peter Lim and agreed a contract extension until 2018 in January but has paid for failing to bring the required level of consistency to the team.
In a statement on their website (www.valenciacf.com) on Monday, Valencia did not name a permanent successor but local media reported Frank Rijkaard, Michael Laudrup and Alejandro Sabella were being considered.
The club added that team delegate Salvador Gonzalez, known as "Voro", will take over while a replacement for Nuno is sought, with the support of assistant coach Phil Neville, the former Manchester United and Everton player.
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The defeat at Sevilla on Sunday, in which Valencia had two players sent off, left them in ninth place with 19 points from 13 games.
Nuno, who hails from the island of Sao Tome and Principe off the west coast of Africa, all-but confirmed he was leaving in his post-match news conference.
In the Champions League, they face a difficult task to reach the last 16, lying third in Group H with six points from five of six games.
Zenit St Petersburg lead with a maximum 15 points, with Ghent on seven. Valencia host bottom side Olympique Lyonnais in their last group game on Dec. 9, when Ghent welcome Zenit.
One of the accusations levelled at the relatively inexperienced Nuno was that he only got the Valencia job because he is represented by "super agent" and compatriot Jorge Mendes, who is also close to Lim.
Valencia president Chan Lay Hoon, a long-term associate of Lim's, told reporters on Monday it was not true that Mendes controlled the club.
"I am pretty fed up with talking about Jorge Mendes in all the news conferences," Chan said. "If Mendes controlled the club Nuno would not have left," she added.
"As far as the new coach goes, I don't think it will be anyone who has any link to Mendes and I want to add that the coach we bring in will be hired for their credentials and for the qualities they will bring to the club."
Valencia's next outing is a King's Cup last 32, first leg at third-tier Barakaldo on Wednesday.
(Writing by Iain Rogers, editing by Justin Palmer and Ken Ferris)
