The 70-year-old took over at St Andrew's towards the end of last season with the Blues deep in relegation trouble but managed to keep them up on a dramatic final day.
The former Tottenham Hotspur, West Ham United and Portsmouth boss subsequently signed a one-year deal to stay in charge and oversaw a busy summer in the transfer market, with 14 new players joining his side.
A terrible start to the season has seen them register just one win and lose their last six games in all competitions, however, leaving them 23rd in the Championship table with a tally of four points from eight games.
Redknapp's final game in charge today saw his side take an early lead against Preston North End, only to be defeated 3-1 on home turf.
"The goals came from basic errors. What can you do about it?" he told reporters after the final whistle. "You stand there as a manager, what can I do about that? What can anyone do? It was just rank, poor play from us that cost us goals. It was very difficult."
Redknapp's departure leaves Birmingham looking for their fourth manager in the space of 10 months, with development coach Lee Carsley now poised to take the reins in the interim.