The decision was taken after a 5-0 defeat by Real Sociedad on Friday which left the club 18th in the table with 17 points from 22 games, three behind 17th-placed Levante.
Parralo succeeded former West Bromwich Albion boss Pepe Mel in October, with Depor then 16th in La Liga with two wins from nine games.
The 50-year-old was promoted from the role of B team coach but could only guide Depor to three wins from his 15 games in charge.
"Deportivo want to thank Cristobal for his effort, dedication and work in the time he has been first-team coach," read a club statement.
Depor are now looking for their third manager of the season, with Parralo the sixth coach to be dismissed by club president Tino Fernandez since he took over in 2014.