Alex McLeish has parted company with Nottingham Forest 40 days after he was appointed manager.
Chairman Fawaz Al-Hasawi told the club website: "I'm bitterly disappointed - as is Alex - that it has not worked out as we had hoped.
"I would like to put on record my thanks for his services and wish him every success in the future."
McLeish was appointed on 27 December to much derision from Forest fans and has only won one game out of seven, losing five of those matches.
McLeish lost his last game at former club Birmingham
The Scot added: "I am extremely saddened to be leaving after such a short period but even so it has been a privilege to be manager of such a fantastic football club and I want to thank the players, staff and fans for their support and wish Nottingham Forest the best of fortunes ahead.
"Both parties entered into the relationship in good faith, however, there was a difference in the understanding of the development strategy of the football club and it was felt by both parties that we should part company."
McLeish replaced predecessor Sean O'Driscoll a day after his Boxing Day sacking despite Forest beating Leeds 4-1 at the City Ground.
The ex-Aston Villa coach's last game was a 2-1 defeat away at former club Birmingham on Saturday as Forest slipped down to 11th in the Championship table.
McLeish said he was "refreshed and ready to go" when appointed in December
His replacement will be Forest's sixth permanent manager in 18 months.
McLeish oversaw Birmingham's relegation to the Championship in 2011 only to be appointed by Aston Villa, again to much outcry from supporters. The Villans won just seven games and finished 16th in the 2011-12 Premier League and McLeish was hounded out shortly after the campaign finished.
The 53-year-old did win the League Cup with Birmingham two seasons ago and guided Rangers to the last 16 of the Champions League in 2005-06, but he has become synonymous with an overly negative approach.
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