The club's board made the decision following a run of a results that has seen the team drop into the League One relegation zone.
"The difficult decision was made inevitable by the recent long run of disappointing performances, particularly at home," read a statement on the club's official website. "The club would like to thank Alan for his hard work and wish him well for the future."
The Irons have since revealed that Brian Laws has agreed to take charge of the club for a third time.
He will be assisted by Russ Wilcox.