Di Matteo's future was the subject of intense speculation after Chelsea suffered a 3-0 defeat in the Champions League at Juventus on Tuesday, meaning they could become the first holders to exit the competition at the group stage.
A statement released on the club's official website on Wednesday morning confirmed the Italian's departure. It read: "Chelsea Football Club has parted company this morning with Manager Roberto Di Matteo.
"The team's recent performances and results have not been good enough and the owner and the Board felt that a change was necessary now to keep the club moving in the right direction as we head into a vitally important part of the season.
"The club faces a difficult task ahead in qualifying for the knockout stages of the UEFA Champions League as well as maintaining a strong challenge for the top of the Premier League while competing in three other cup competitions. Our aim is to remain as competitive as possible and challenge strongly on all fronts.
"The owner and the Board would like to thank Roberto for all he has done for the club since taking over in March. Roberto helped guide us to an historic Champions League victory and a seventh FA Cup. We will never forget the huge contribution he has made to this club's history and he will always be welcome at Stamford Bridge.
"The club will be making an announcement shortly regarding a new first team manager."
Di Matteo was appointed as caretaker manager at Stamford Bridge in March 2012 after Andre Villas-Boas' departure, and the Italian's achievements of lifting the Champions League and FA Cup trophies earned him a two-year contract in June.
But a run of two wins in eight matches in all competitions led to suggestions he could be relieved of his role by owner Roman Abramovich, who has overseen five permanent managerial appointments since taking over at the club in 2003.
Reports have already linked Rafa Benitez with the post, with the Times suggesting the ex-Liverpool coach could be lined up for a temporary role until the end of the season, after he was approached in the summer.
ESPN understands Abramovich's No. 1 target is former Barcelona boss Pep Guardiola, who is currently on a sabbatical, with the Russian keen considering an interim appointment until the Spaniard becomes available in the summer.
source: soccernet
