Nigel Pearson has been sacked by the Leicester City, following a collapse in the relationship with the club's board of directors..
In a statement posted on its website, the Leicester City Football Club said that Craig Shakespeare and Steve Walsh will take charge of first team duties while the club begins the recruitment of a new manager.
"There will be no further comment until this process is completed."
The club said that it has "become clear to the club that fundamental differences in perspective exist between us [Pearson and the board]. Regrettably, the club believes that the working relationship between Nigel and the board is no longer viable."
It said the club's owners Vichai and Aiyawatt Srivaddhanaprabha remain "wholly committed to the Club's long-term development and to on-going investment in a squad that will continue to be competitive in the Premier League.
"We trust that the Club's supporters will recognise that the owners have always acted with the best interests of the Club at heart and with the Club's long-term future as their greatest priority.
The Telegraph said that the dismissal of Pearson's son James was a pivotal factor. James and two other players were dismissed by the club after they were filmed during an orgy in which they racially abused a woman on a post-season tour of Thailand.
James, Tom Hopper and Adam Smith have had their contracts terminated after an internal investigation and disciplinary proceedings. Leicester City were on tour in Thailand, home of the father and son billionaire owners, after surviving relegation from the Premier League in the 2014-15 season.
Contenders for the vacant post include: Sean Dyche, the Burnley manager, David Moyes, the former Manchester United manager now in charge at Real Sociedad,and Martin O'Neill, a former manager at Leicester who is now in charge of the Republic of Ireland.
The Telegraph said Harry Redknapp was targeted by Leicester two years ago but said the Thai owners may seek a more dynamic appointment as they look to build a strong reputation in the Far East.