Carlo Ancelotti has been sacked as manager of Real Madrid after two seasons in charge of the Spanish club.
The Italian, 55, led Real to victory in the Spanish Cup before claiming the club's 10th European Cup last season.
But this year they were knocked out by Juventus in the Champions League semi-finals, while Barcelona won La Liga.
Napoli boss Rafael Benitez is the favourite to take over the vacant role once the Italian season ends.
Ancelotti's side finished second in Spain's top flight, two points behind Barca, who have reached the Spanish Cup and Champions League finals.
Club president Florentino Perez told a news conference it had "not been an easy decision" before thanking Ancelotti and adding that a new manager would be appointed "next week".
"What did Ancelotti do wrong? I don't know," Perez added. "The demands here at Real Madrid are very high. The affection that the players and the fans have for Carlo is the same as the affection I myself have for him."
Real beat city rivals Atletico Madrid 4-1 after extra time in the Champions League final in June 2014 to claim 'La Decima' - their 10th victory in Europe's most prestigious club competition.
It was Ancelotti's third Champions League title as a manager - he also won it twice with AC Milan, in 2003 and 2007 - but he leaves Madrid having failed to claim the Spanish title since joining from Paris St-Germain in July 2013.
The former Chelsea boss, whose contract was due to run until the end of next season, also won the Club World Cup in December before Real were knocked out of the Copa del Rey by Atletico in January.
In an interview with Italian newspaper Il Giornale published on Monday morning, before his departure was announced, Ancelotti said he would take a year off and have back surgery if he left Real.
"I must have a back operation because of spinal stenosis that for some time creates a tingle in my hands," he said.
"I don't know how long the period of recovery will be," he added. "I can assure you that I've had plenty of offers from Italy, England, Germany. I'm sure they will not be lacking from here until next year."
An inevitable but unpopular decision?
Spanish football expert Andy West: "In one sense, Ancelotti's departure was inevitable because all-powerful Real president Florentino Perez appears to have taken the decision a while ago.
"Even in mid-March, Perez would only assert that Ancelotti would be in charge for the next few 'days and weeks', and from that moment it seemed certain the Italian's fate rested on his team's ability to win either the Champions League or La Liga.
"With both those trophies escaping Real's grasp, Monday's news is no surprise. But the stubborn Perez has been forced to withstand an unexpectedly strong degree of public and private pressure because Ancelotti remained highly popular to the end.
"His last pre-game news conference on Friday ended with the media giving him a standing ovation, which was subsequently repeated by fans before Saturday's game against Getafe at the Bernabeu.
"Then several players voiced their support for the coach, most notably Cristiano Ronaldo and James Rodriguez.
"But Perez ignored all of them, and now faces a tough task in placating those within and outside his organisation who wanted to keep Ancelotti by appointing a suitable replacement. And the early signs are that Rafa Benitez would receive little more than a lukewarm reception."