The Black Cats failed to win at The Stadium of Light yet again on Tuesday night as they drew 3-3 with fellow strugglers Bolton Wanderers. This was seen as the final straw for the club's hierarchy who dismissed Grayson soon after the final whistle.
In a statement released on the Sunderland website, the club's Chief Executive Martin Bain stated: "Simon and his team have worked tirelessly to achieve the best for the football club during their time here."
He added: "While we hoped that Simon's experience in the Football League would help us to a successful season, results have not been good enough for a club of this stature. In order for us to improve upon our current position we believe a fundamental change is necessary."
Grayson's departure has also signalled the end of assistant manager Glynn Snodin's time at the club. Sunderland will now begin their search for a new manager as they look to get their season back on track.
What went wrong for Grayson?
When Grayson left Preston North End to take over at Sunderland four months ago following their relegation from the Premier League, he was under no illusions on how tough the job would be. However, he may now be regretting his decision to leave Deepdale.
The 47-year-old manager managed to pick up just one victory during his time in charge which came in a 3-1 win against Norwich City at Carrow Road. This means that Sunderland's dismal record at The Stadium of Light has continued with the Black Cats last picking up a home win in December 2016.
Tuesday night's game against Bolton Wanderers presented a great opportunity to end this run of form but the home side squandered a 2-1 lead and ended up drawing the game 3-3. This has left Sunderland in the relegation zone, two points adrift of Birmingham City who sit in 21st who also have a game in hand.
There is no doubt that Grayson had to be dismissed as the club cannot afford back-to-back relegations. As it stands, League One appears to be a significant possibility and whoever takes over will have a huge job on their hands.
The club had aspirations of an immediate return to the top flight before the season kicked off but it would take a huge revival for Sunderland to end their season in success now. They are currently sat a whopping 13 points off the play-off places and 21 points off the automatic places.
What next for Sunderland?
Grayson has become the ninth permanent manager to be dismissed by Sunderland since Roy Keane's exit in December 2008 and the club will now draw up another list of potential successors to help save the club's season.
A number of names have already started to be linked with the job including Ryan Giggs, Gordon Strachan, Alan Pardew, David Moyes and more. Some of the club's supporters have even called for the board to make an ambitious move for former boss Sam Allardyce who saved the club from relegation in the 2015/16 campaign and is currently available.
It will be interesting to see who the board opt to appoint as the new manager of the club as there is no doubt that it is a huge decision with the current position they find themselves in. Sunderland face a trip to the Riverside on Sunday to face Middlesbrough in what looks set to be another tricky test for the Black Cats.