The Cottagers dropped out of the Premier League at the end of the 2013-14 campaign, and Magath's side have lost six of seven matches in the second tier.
The latest defeat for Magath, who was appointed Fulham boss in February, came in last night's 5-3 loss to Nottingham Forest at the City Ground.
Fulham owner Shahid Khan told the club's official website: "This is an unfortunate but necessary change. I am doing what I feel is right and needed for Fulham Football Club, for today as well as tomorrow.
"I thank our supporters for standing by us during these most difficult of times on the pitch, and promise better days ahead."
Kit Symons has taken temporary charge of the first team while the club search for a new manager.