The Scottish coach took over at the Midlands club last summer, but his appointment was treated with reluctance from the Villa fans due to his links with local rivals Birmingham City.
McLeish failed to win over the club’s fans, and only seven Premier League victories this term saw Villa in a relegation scrap come the end of the season.
In the end up the Villa Park outfit avoided the dropzone by two points, but McLeish has paid the price for a slow campaign.
“We need to be clear and candid with ourselves and with supporters about what we have lacked in recent years,” chairman Randy Lerner told the club’s official website.
“Compelling play and results that instil a sense of confidence that Villa is on the right track have been plainly absent.
“The most immediate action that we can take is to look carefully at our options in terms of bringing in a new manager who sees the club’s potential and embraces our collective expectations,” he stated.
Chief executive Paul Faulkner is eyeing a quick appointment of a replacement to give the new man a chance to prepare for next term.
“We’d like to thank Alex for his hard work and efforts throughout this tough season.
“We are mindful of the club’s need to prepare thoroughly for the new campaign and for the new manager to be able to begin working with the board so that he is quickly immersed in these preparations and also in the long-term objectives of the club.
“Our focus now will be driven by these imperatives and we will update when appropriate,” he concluded.
Early frontrunners for the post are Wigan’s Roberto Martinez and Norwich’s Paul Lambert.
By Gareth McKnight