Watford sacked Quique Sanchez Flores on Sunday, just 85 days into his second stint with the Hornets.
"Quique is a man of great integrity and it was clear how much he wanted to have a positive impact, but ultimately results have dictated our decision," Hornets' Chairman and CEO Scott Duxbury said in a statement.
The Spaniard failed to turn the club's season around in the 10 Premier League matches since his surprising return to Vicarage Road in September after being named Javi Gracia's successor.
The London-based club sits last in the Premier League after 14 games. Watford have only managed to win one league match under the 54-year-old's leadership. He previously served as the team's head coach during the 2015-16 campaign.
Saturday's away loss to Southampton leaves Watford six points from safety.
A new manager is expected to be appointed before Wednesday's encounter with Leicester City.
"The appointment of a new head coach is imminent, and with nearly two-thirds of the season remaining, we will provide all the support necessary to make the coming months successful," Duxbury said.
It was reported in recent days that some members of the club had lost faith in Flores' ability to get the team back on track. There was also disappointment in his decision to not use captain Troy Deeney in Saturday's match.