The Championship club made the announcement on Saturday evening, just hours after the Rams' 1-0 loss at the City Ground.
It was a third defeat in eight days for the team bossed by Clough, who followed in his late father Brian's footsteps when he took the job at Derby in January 2009.
Clough was the longest-serving manager in the Championship but the owners decided he had taken the club as far as he was able.
A statement released by Derby said: "Derby County have this evening announced that they have parted company with manager Nigel Clough with immediate effect.
"Clough has been in charge at the Rams since January 2009 and the club would like to place on record their thanks to him for his tireless efforts to bring stability to Derby County, and his hard work and dedication throughout his tenure.
"However, after much consideration, the board feel it is time to move Derby County forward to the next level, which will necessitate a comprehensive review of the club's football operations.
"The ownership group remain steadfastly committed to the club and maintain their desire to compete at the top end of the Championship this season.
"The search is well under way to identifying and appointing a successor, and further announcements will be made in due course.
"The club would also like to take this opportunity to wish Nigel Clough well for the future."
Source: Newcastle United Mad