The Portuguese, 55, won the League Cup and the Europa League at Old Trafford.
But United are sixth in the Premier League, 19 points behind leaders Liverpool, who beat them 3-1 on Sunday.
“A caretaker-manager will be appointed until the end of the season while the club conducts a thorough recruitment process for a new, full-time manager,” United said in a statement.
“The club would like to thank Jose for his work during his time at Manchester United and to wish him success in the future.”
United’s haul of 26 points after their first 17 Premier League games, is their worst tally in the top flight at this stage since 1990-91.
They are 11 points off the top four and closer to the relegation zone than the top of the table.
Mourinho’s sacking comes after a fall-out with £89m record signing Paul Pogba, who was an unused substitute for the defeat at Anfield on Sunday.
And it continues his run of never completing four consecutive seasons in charge of a club.
Only once has he made it into a fourth campaign, but he left Chelsea on 17 December 2015 during his second spell at Stamford Bridge.