Schalke parted ways with coach Huub Stevens on Sunday after a run of six Bundesliga games without a win.
Stevens agreed to leave ''by mutual consent'' following talks with management in the morning, the Gelsenkirchen-based club said on its website.
Stevens' job was on the line following Saturday's 3-1 league loss at home to Freiburg, extending an alarming run that saw the side slip from second to seventh within a month.
''It's not a good situation. Our expectations are coming up short,'' Schalke general manager Horst Heldt said after the game.
Assistant coach Markus Gisdol was also released with immediate effect.
Schalke's under-17 team coach Jens Keller took charge of Sunday's training session and will lead the side against Mainz in Tuesday's German Cup game on Tuesday.
Schalke said the decision to release the 59-year-old Stevens, who was in his second stint at the club, was ''anything but easy.''
In the Dutchman's first stint, from 1996 to 2002, Schalke won the 1997 UEFA Cup, the German Cup in 2001 and 2002, and just missed out on the Bundesliga title in 2001.
Stevens took over again on Sept. 27, 2011, following Ralf Rangnick's resignation due to burnout, and led the side to third in the Bundesliga to secure qualification to the Champions League.
This season, however, Schalke's domestic form dropped following a bright start, arguably because of the strain of the Champions League, where it finished group winner ahead of Premier League side Arsenal.
Schalke claimed 20 points from its opening nine Bundesliga games, but only five points in the following eight matches before the winter break.
