Benitez was an unpopular appointment in June last year after his long spell with Everton’s Merseyside rivals Liverpool.
The Spaniard paid the price for a dismal run of nine defeats in Everton’s last 13 league matches, culminating in a 2-1 loss at lowly Norwich on Saturday.
“Everton Football Club can confirm the departure of Rafael Benitez as first-team manager,” a club statement said.
“Benitez, who joined Everton in June 2021, has left the club with immediate effect.
“An update on a permanent replacement will be made in due course.”
Former Everton forward Wayne Rooney, currently impressing as manager of second tier Derby, is the bookmakers’ favourite to replace Benitez.
Rooney is a boyhood Everton fan who had two spells at the club as a player either side of his successful time at Manchester United.
He has kept Derby competitive in the Championship despite dealing with a pair of points deductions and the club’s descent in administration.
Rooney’s former Everton team-mate Frank Lampard, sacked by Chelsea last year, is another contender for the job.
Brighton boss Graham Potter and Paulo Fonseca, whose last job was with Roma, could also be in the running.
Under Benitez, Everton earned just 19 points in 19 league matches, their lowest tally at the halfway stage of a season since 2005-06.
Everton fans had made clear their desire for Benitez to be axed during the limp loss at Norwich.
They chanted for his dismissal and held up a banner reading ‘Benitez get out of our club’, while one supporter invaded the pitch in an attempt to confront the former Real Madrid boss.
Everton held an emergency board meeting on Saturday evening to discuss Benitez’s future, with the talks leading to his departure yesterday.
Benitez’s controversial appointment to replace Carlo Ancelotti after the Italian’s move to Real Madrid was a major gamble by Everton owner Farhad Moshiri.
Benitez had infuriated Everton fans by describing them as a “small” club during his time at Liverpool, who he led to a Champions League final triumph against AC Milan in 2005.
Merseyside police investigated a threatening banner near Benitez’s house which read: ‘We know where you live, don’t sign’ before his appointment.
Last month, Moshiri stood by Benitez, claiming the 61-year-old would be given time to get things right with new signings and injured players coming back.
But Everton’s results have shown no signs of improving and, with the mood among the fans increasingly toxic, it was clear Benitez would have to go.
Across Stanley Park, Liverpool fans celebrated their rivals’ latest woes by chanting Benitez’s name when news of his sacking reached Anfield during Liverpool’s match against Brentford, which the Reds won 3-0.
Benitez leaves Goodison Park with Everton languishing in 16th place, just six points above the relegation zone.