"The club would like to place on record its thanks for the hard work, honesty and integrity he brought to the role," United confirmed in a short statement.
The new comes less than 48 hours after Manchester United lost 2-0 to Everton making it mathematically impossible for them to qualify for the Champions League.
Moyes arrived at Manchester United's training ground at on Tuesday morning where he was informed of the news by chief executive Ed Woodword.
Moyes, who turns 51 on Friday, was appointed on the recommendation of fellow-Scot Sir Alex Ferguson, who retired at the end of last season after 26 years in the job.
Moyes signed a six-year contract with the club last summer, but as the club failed to make the top four, it is believed United need only compensate him one year's wages – which would be around £4.5 million.
Manchester United legend Ryan Giggs, assisted by former team-mate Nicky Butt, is expected to manage the club on a temporary basis until the end of the season.
According to the Sun, Netherlands manager Louis van Gaal wants the job while the Daily Mail say the former Barcelona and Ajax boss is 'first in line'. Van Gaal, who has confirmed he is leaving the Dutch national team after the World Cup, is currently the bookmakers' 7/2 favourite for the position.
Dortmund manager Jurgen Klopp (5/1) is now second favourite for the job, although he did extend his contract with the Bundesliga giants until 2018 only last October.
EUROSPORT'S VIEW
After watching such a public 'employment execution' it is hard not to feel a little sympathy for Moyes. However, crucially, there seems to be very few people suggesting the Glazers are making a mistake by moving in a new direction. United needed to act, their decline from champions to seventh place in the space of 10 months was simply unacceptable. Moyes has certainly not been helped by his players who need to take a large chunk of the responsibility, but the results speak for themselves. Moyes simply had to go.
WHAT HAPPENS NEXT
United need to act fast as they have a big summer of recruitment coming up. Moyes suggested the club was already working on a few deals and the club needs to know which potential moves the new boss is happy for them to push on with, and which they should abandon, as soon as possible as there can be no repeat of last summer's disastrous transfer window. Of the main contenders Van Gaal looks the easiest move to push through but his commitments at the World Cup presents its own problems. The tournament runs until July 13 and it would be no surprise to see the Netherlands competing in the latter stages.
As for Moyes, well his pay-off could be dependent on him not finding a new position so it would be no surprise to see him take a year off so he can pocket a full year's salary before returning to work, as it is unlikely anyone is going to pay him a wage that matches United's. He should still have enough cache to land a Premier League job but the bigger clubs are sure to stay away after his disastrous tenure at Old Trafford.
WHAT THE MEDIA SAID
Matt Dickenson (The Times): The saddest thing is that Moyes will depart without anyone even knowing what he was trying to build. He leaves no impression except memories of that ashen face, or slumping so deep in the dugout that it looked, understandably, as though he was trying to hide. A lifetime in football deserves better than to be recalled for one failure but, just as Steve McClaren will spend the rest of his days answering questions about umbrellas, Moyes will always be dragged back to this wreckage. McClaren is proof that there are second acts in managerial lives but this was Moyes’s chance, his shot at the big time. He will not get another opportunity like it and a year’s salary, about £4.5 million, will feel like scant consolation considering the wounds to his professional reputation and pride.
Gary Neville (Sky Sports Monday Night Football): I genuinely believe that when you give a man a six-year contract that he deserves an opportunity and the time. The reason we are sat [in a TV studio] is because we look at football management and think of it as being a world of madness, an absolute world of madness where the average manager gets sacked every 12 months. I've always felt that Manchester United should be different and hold itself up as a club that basically stands against what is happening in the game. We used to laugh at Italy 20 years ago and say it was ridiculous what's happening there, but now we have almost become accustomed to it.
WHAT THE FANS SAY
Celebrity fan Eamonn Holmes (on Twitter): Well looks like the obvious and sadly the right thing has happened. David Moyes to be sacked. I'm sure David Moyes is a nice man, but he just didn't understand our team and our players didn't understand him. This is the right thing. Can anyone seriously say that with the same players we would be in the same position if Mourhino had have been appointed? And to those of you who believe his first season was no different than Fergie's - what nonsense - this man inherited The English Champions. One of the reasons he kept his job so long was that too many football writers wanted a British manager at one of the elite clubs. Of course the players weren't motivated by him - neither they or us as supporters understood his game plan. He has to go because it was obvious things were never going to get better under him . Rubbish signings, rubbish tactics.
Paul Gent (Eurosport Yahoo! user): It was an awful job to take after SAF. In his defence he was way over his head, never a top rate manager. Everton have gone on after Moyes which alone proves he was never good. United players however have been awful this season, far too much money for players that are just not good enough. £72 million on only two players, far, far, far too much. He should have gone in January but he never got going and his players failed him. He will be back with a team more to his skill, but United need a top, top manager. Would you as the owners want him to have a £200 million transfer budget, I doubt the answer would be yes. Get a new top manager in the seat and allow him to stamp him own mark on the team. kick out all the dead wood, get rid of players who don't want to play for the team. Get rid of all the players who blackmail the club. And start again from fresh. Liverpool have done it, City have done it, and Chelsea have always done it. Winning, winning, winning mentality.
