Cardiff owner Vincent Tan claims the decision was down to the Scot airing the club's "dirty linen" in public.
A statement on the Cardiff website read: "The board of directors at Cardiff City Football Club have today relieved Malky Mackay of his duties.
"A new first-team manager will be appointed and announced in due course.
"There has been a good deal of publicity generated by, and about, Mr Malky Mackay for the last few months.
"Indeed, far too much dirty linen has been exposed to the public gaze but, I stress, not by me.
"Indeed, I have deliberately not responded to this, hoping that the club can be judged on its football rather than personalised arguments about who said what to whom.
"I have, however, regretfully concluded that it is no longer fair to the club, its players, its fans and the public more generally for this uncomfortable state of affairs to continue.
"Cardiff City Football Club means far too much to us all for it to be distracted by this."