Saturday's 1-0 home defeat by Dunfermline, which sparked impromptu protests against chairman Rod Petrie and the rest of the Easter Road board, proved the end for Calderwood after little more than a year in the post.
Calderwood took charge of 49 games after leaving his post as Newcastle assistant manager in October last year but guided Hibs to just 12 wins.
Now he is expected to be reunited with Hughton at St Andrews.
Hibernian FC spokesman: "Hibernian FC announced today that the board of directors had relieved Colin Calderwood of his duties as manager of the club.
"I would like to thank Colin for his time as manager.
"The board decided that it was in the club's best interests to find a new manager to take Hibernian forward."
Hibs reportedly turned down a compensation offer of several hundred thousand pounds from Birmingham some months ago.
Source: FOOTYMAD
