Assistant Dominique Ducharme will take over as head coach on an interim basis.
Montreal started the season 7-1-2 but has just two wins in its last eight games. The Canadiens are coming off back-to-back losses to the Ottawa Senators and are now 1-1-2 against the North Division's last-place team this season.
"I would like to sincerely thank Claude and Kirk for their contributions to our team over the past five years during which we worked together," general manager Marc Bergevin said. "I have great respect for these two men whom I hold in high regard."
This marks the second time Montreal has fired Julien. His first stint with the club ended during the 2005-06 campaign after parts of three seasons.
Julien failed to lead the Canadiens past the first round of the playoffs during his second tour of duty with Montreal, though the team did upset the Pittsburgh Penguins in last year's qualifying round.
The 60-year-old owns a 201-175-10-50 record across his two stints with the Canadiens and ranks fifth on the team's all-time wins list.
Ducharme, meanwhile, was in his third season as Julien's assistant. He's best known for serving as Canada's head coach at the world juniors in 2017 and 2018, helping the team win silver at the former and gold at the latter.
"In Dominique Ducharme, we see a very promising coach who will bring new life and new energy to our group," Bergevin said. "We feel that our team can achieve high standards, and the time had come for a change. "
Former NHLer Alex Burrows, who previously served as an assistant coach with the AHL's Laval Rocket, will join Ducharme's staff. Luke Richardson and Stephane Waite are staying on as assistant coach and goalie coach, respectively.