The former Celtic manager picked up just seven points from 11 games and the midweek Johnstone's Paint Trophy defeat to Bury was the last straw for the Rovers board.
Barnes took the reins following the surprise departure of Ronnie Moore, but the former England international has failed to turn the club's fortunes around.
Tranmere will now begin the search for a new manager in earnest as they prepare for Monday's game with Stockport.
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