Atletico Madrid fired coach Gregorio Manzano on Thursday after a miserable run capped off by their elimination from the King's Cup.
"The executive committee of Atletico Madrid, meeting this Thursday to analyse the sporting situation, unanimously decided to dismiss Gregorio Manzano as coach of the first team," the team said in a statement.
"This decision has been relayed to the coach, with whom an agreement has been reached to end his contract," it said.
Manzano had apologised to fans after Atletico lost 0-1 at home to second division Albacete on Wednesday, ushering them ignominiously out of the King's Cup, describing it as a "real failure".
"We deserved all the whistles and all the reprovals of our fans," he told a news conference.
"There have to be people responsible and professionals. When things don't go well, undoubtedly you have to accept the criticism and I am the first to accept it," he said.
"I personally apologise because the truth is that our fans have been supporting the team even in adversity until they could see we were powerless to get back on the scoreboard."
Atletico, who lie 10th in the first division, said they thanked Manzano, who was hired in June for one season. A former Seville coach, Manzano had also previously coached Atletico before his return.
Former Argentine player Diego Simeone, who played for Atletico Madrid in the past, is widely seen as a favourite for the coaching job.