Pressure had been building on the beleaguered manager after a miserable start to the season was compounded by defeat against Real Madrid last weekend.
Another flat performance proved the final straw for the 58-year-old, who was only appointed in August of last year, but has overseen a period of continuous turmoil, headlined by the departure of Lionel Messi in the summer.
A statement read: “FC Barcelona has relieved Ronald Koeman of his duties as first team coach. The president of the club, Joan Laporta, informed him of the decision after the defeat against Rayo Vallecano. Ronald Koeman will say goodbye to the squad on Thursday at the Ciutat Esportiva.
“FC Barcelona wishes to thank him for his service to the club and wishes him all the best in his professional career.”
Another club legend, Xavi Hernandez, is seen as the favourite to replace Koeman, while Marcelo Gallardo, the coach of River Plate in Argentina, and Belgium manager Roberto Martinez have also been mooted as candidates.
Koeman’s successor will have to contend with several problems on and off the field, though, with Barcelona struggling both domestically and in Europe while financial uncertainty rumbles in the background.