Real Madrid Club de Futbol have confirmed that manager Carlo Ancelotti has been sacked with immediate effect.
The Italian manager secured Real Madrid's tenth Champions League victory last season but ended the 2014/15 season trophyless for Los Blancos as Barcelona won La Liga.
It has been clear for some time that his time in the Spanish capital was coming to an end.
Ancelotti was appointed by club president Florentino Pérez on June 25th 2013 after Jose Mourinho left the club. He has been at the club for less than two years.
The club released a statement saying that a new manager had yet to be found but the search for one would begin very quickly as Real Madrid look to bounce back to the top of European football after a disappointing year.
Club president Florentino Perez said: "I would like to inform you that the board has taken the decision to relieve Carlo Ancelotti of his post as Real Madrid coach."
"I hope that next week, we can announce the identity of our new coach. It would be very good if the new coach can speak Spanish" Perez said, with Rafael Benitez the favourite to replace Ancelotti.
"I want to publicly thank Carlo Ancelotti for his work during these two years. I spoke with Carlo Ancelotti before coming here. I can only say that he is a gentleman and that he understands.
"We haven't told the captains, because it is a decision that has been taken now.
"It was a very difficult decision to make; the demands at this club are the utmost because Madrid always wants to win silverware. It was decision analyzed throughout the year but taken this week, We talked to Ancelotti this afternoon to tell him everything.
"The affection that the players and the fans have for Carlo, is the same as the affection I myself have for him.
"What did Ancelotti do wrong? I don't know exactly. The demands here at Real Madrid are very high."
Real Madrid have said they will appoint a new manager next week, at the start of June.
ANCELOTTI'S POOR YEAR
On Sunday, Ancelotti said he wanted to remain at the club but if they decided to make a change, he would not go back into managing immediately.
"My future is clear in my head. I will continue here at Real Madrid or I will stop for a year," Ancelotti said.
"I think we are going to meet next week to clarify the future of the club."
"I want to stay. If the club says I can't continue I won't be happy but these things have happened many times in football." Ancelotti added.
"This is football, especially at a club like Real Madrid it is normal to be questioned after part of the season didn't go well."
Ancelotti has previously been linked with the Manchester City job but as the news became clear that he would be leaving the Santiago Bernabeu, reports also suggested he was a target for AC Milan and West Ham United.
On Monday 18th May, the club’s institutional director, Emilio Butragueno, said: “It’s not the time to say. And nor is it the place. There’s a game left to play and we need to prepare for what’s coming.”
Real Madrid finished their unsuccessful La Liga season in second, with an emphatic 7-3 victory over Getafe. Cristiano Ronaldo scored his 8th hattrick of the season in the first half before being replaced by 16-year-old Martin Odegaard.
Ronaldo tweeted his support for Ancelotti in the midst of the rumours after the game.
ANCELOTTI'S RECORD AT MADRID
“I can assure you that I have not lacked opportunities, from Italy, England and Germany," Ancelotti told Il Giornale last week, "And I will not lack [offers] between now and next year.
"But I said it in the press conference and I repeat: I will stop for a year, also because I have a very serious reason for stopping.
"I have to have an operation because of my cervical stenosis. For some time, it has been affecting my hands and if I lose any more time, it could pass into legs, so I have an appointment for surgery.
"And, frankly, I do not know how long I have to be physically stopped, in terms of the post-operative phase and the subsequent rehabilitation.”
Rumours will now be circulating of who will succeed Ancelotti in one of the most high-profile jobs in football. Napoli boss Rafael Benitez is favourite to take over at the Bernabeu.