The 66-year old Argentine was in charge of the Yorkshire outfit for three and a half years, having taken charge in June of 2018.
He guided the club back to the Premier League for the 2020-21 season following a 17-year absence with Leeds finishing ninth.
This season proved a much tougher proposition as the Whites have recorded just five wins this campaign and were outscored 17-2 over their last four matches.
Club statement on Bielsa
Leeds chairman Andrea Radrizzani issued a statement following the decision to let Bielsa go.
"This has been the toughest decision I have had to make during my tenure at Leeds United, taking into account all the success Marcelo has had at the club.
"With Marcelo as our head coach, we had three incredible campaigns and the good times returned to Elland Road. He changed the culture of the club and brought a winning mentality to us all.
"The moments created, particularly in the 2019-20 season and winning promotion to the Premier League will of course live long in all our memories, myself and the fans included.
"However, I have to act in the best interest of the club and I believe a change is required now in order to secure our Premier League status. Recent results and performances have not met our expectations.
"We find ourselves in a precarious league position and I feel now is the right time to bring in a new head coach in order to have an impact at the decisive stage of the season.
"Naturally, myself, along with everyone else at the club would like to thank Marcelo for his efforts and achievements and we wish him the very best in the future."
"He has created a legacy, overseeing major infrastructure improvements at Thorp Arch, uniting the supporters and players, and giving a clear pathway for young players to transition into the first team.
"It is disappointing his reign has had to end in this manner, given the special times we have enjoyed in recent years, which have been some of the best in my career, but we cannot hide from recent results.
"I would like to thank Marcelo for his commitment and dedication, and I wish him every success going forwards."