The 43-year-old Italian took charge of the Irons in September 2008 and was a favourite with both the club's fans and players.
However, the arrival of new owners David Gold and David Sullivan placed a huge doubt over Zola's future with the club and he has now been sent packing by the former Birmingham City supremos.
A short statement from the Hammers read: "West Ham United confirm that they have terminated the contract of Gianfranco Zola.
"The board of directors would like to thank him for his contribution and wish him well for the future. The club will now be focusing its efforts on seeking a replacement."
Zola had said after a 1-1 draw with Manchester City on the final day of the season: "This week we will have a meeting with the club, we will talk and see what the outcome will be. We will have a long and interesting chat.
"It's been a tiring and exhausting season for us. All of the staff have been under a lot of pressure.
"We wanted to give something different, but circumstances, mistakes and other things didn't allow us to do that, to give to the team what we wanted to give."
Source: DSG
