Schalke was eliminated in the first knockout round in the past two seasons in the Champions League.
Di Matteo, a former Italy midfielder, led Chelsea to an unexpected Champions League title in 2012, but his reign as manager lasted less than a year. He was fired early in the following season with the club’s defense of the European trophy in tatters.
Born in Switzerland, Di Matteo played for Swiss clubs before moving to Lazio in Rome and later to Chelsea.
His coaching career started with Milton Keynes Dons and continued at West Bromwich Albion before he joined Chelsea, first as an assistant in 2011.
Keller is already the second coach to lose his job seven matches into the season, after Hamburg’s Mirko Slomka.