It had been widely reported over the past week that the 54-year-old’s time in charge at St James’ Park was due to come to an end.
The club have confirmed that the board began deliberating over McClaren’s future after the team lost 3-1 to Premier League new boys Bournemouth at home on March 5.
The former England manager was appointed as John Carver‘s successor last June, but struggled to make a positive impact as the team have lost 16 of their 28 league games and have won just six.
The North-East outfit were one of the big spenders in the January transfer window after bringing in a handful of new faces, including England internationals Jonjo Shelvey and Andros Townsend, but in 2016, Newcastle have won just two of their nine league games and sit second from bottom in the table, one point from safety.
A statement on the club’s official website read: “After the defeat to Bournemouth on Saturday the club has spent some time considering its position and has today concluded that Steve McClaren’s employment with the club will end with immediate effect.
“We acknowledge that reaching this decision has taken a number of days and that this has caused uncertainty for everyone involved, in particular for Steve and the players, for which we apologise. However we felt that this time was necessary to ensure the right decisions were reached with the best interests of the club at heart.”
Managing director Lee Charnley added: “I would like to thank Steve personally for his services to Newcastle United. He is a man of integrity and class and he has conducted himself with great dignity during this difficult time.
“Steve worked tirelessly to try and bring success to Newcastle United. He has the utmost respect of all the players, staff and management and he leaves with our very best wishes and sincere thanks.
“We feel that a change is now needed in order to give the club the best possible chance of securing its Premier League future. A further announcement on a successor to Steve will be made in due course.”
Former Liverpool and Real Madrid manager Rafael Benitez is widely expected to take charge of the relegation battlers, with some reports claiming that the Spaniard is poised to sign a three-year contract.
Benitez, who has won 12 trophies during his managerial career, has been out of work since getting sacked by Madrid on January 4.