Saturday’s 2-0 defeat at Preston left Villa 19th in the Championship despite a summer of spending under new owner Tony Xia following relegation.
Di Matteo was brought in as the permanent successor to Remi Garde, but the Italian’s reign is over after just four months. Steve Clarke will take charge until a new manager is appointed.
A club statement read: “Aston Villa Football Club has today parted company with manager Roberto Di Matteo.
“The Club decided to act following a run of disappointing results which has the left the team occupying 19th position in the Championship. The Club would like to place on record its appreciation to Roberto for all his efforts in helping rebuild the squad and wish him well for the future.”
Xia also posted his reaction on Twitter, saying: “A difficult decision for the board. But rather sooner than later we’d make the decision. Di Matteo twice broke the Championship record for a transfer fee in the summer window, bringing in Ross McCormack for an initial £12m and then paying Bristol City £15m for Jonathan Kodjia.
The two forwards have scored just three times between them as Villa – among the pre-season favourites for promotion – have drawn seven of their 11 Championship games.
Jonathan Kodjia was signed from Bristol City this summer for a Championship record fee
As recently as this weekend Di Matteo claimed to have the club’s backing, saying: “It’s normal when results are not as expected that everybody questions – it’s part of the job – but I’ve had total support from the club.”
But, according to inside sources, Di Matteo was told of his sacking by chief executive Keith Wyness in the hours after the Preston game, and Sunday was spent reaching an agreement on compensation.