Pearce was in charge of 97 games at Manchester City

The 45-year-old, who is also England Under-21 coach, has had his contract terminated with immediate effect - only a day after the end of the season.

Chief executive Alistair Mackintosh told the club's website: "The board of directors would like to thank Stuart for his hard work and service."

Pearce took over from Kevin Keegan as City manager but his side struggled to 14th in the Premiership this season.

Interview: Man City defender Danny Mills

The former England captain took the helm at City after a successful spell as caretaker boss during which he guided the club to within a goal of qualifying for the Uefa Cup.

And after a good start to his first full season in charge he was touted as a potential replacement for then England head coach Sven-Goran Eriksson.

But things soon went downhill and after a season in which City had climbed as high as fourth during the opening weeks of the campaign, they tumbled down the table to finish 15th in 2005/06.

And there was little improvement this term as City struggled in the bottom half of the Premiership and scored only 10 goals at home all season, the worst record in the history of top-flight football.

City defender Danny Mills, who fell out with Pearce, believes his former boss was shown the door because of his poor record in the transfer market.

"As a manager you're judged on results and if they are just okay you get judged on your signings - and they weren't fantastic," he told BBC Radio Five Live.

606: DEBATE Why Pearce had to go BBC Sport's Chris Bevan

"Because of the big money involved in football, boards tend to be a little bit wary about giving you more money.

"That's possibly why they feel it's time to wield the axe.

"And the players have been slightly discontented this season and a new manager has to come in and put that right - a happy club is normally a successful club."

There have also been question marks over discipline within the squad after Ben Thatcher's reckless challenge on Pedro Mendes in August earned an eight-match ban.

And more recently fellow full-back Michael Ball was suspended for three games for a stamp on Manchester United's Cristiano Ronaldo.

In addition, midfielder Joey Barton, who had been critical of Pearce's signings, was suspended by the club after a training ground bust-up with Ousmane Dabo, which left the French midfielder unconscious.

And after City's 2-1 defeat at Tottenham on the final day of the season, the club's sixth match without a win, Pearce admitted his future at the club was shrouded in doubt, with speculation growing over a potential Thai-based takeover.

Asked whether a takeover could cost him his job, Pearce said: "Whether it is me or not is out of my hands.

"I hope it's me, I've done a reasonable job but I know our shortcomings and plan to address them this summer.

"If it isn't me, I'll move on and manage elsewhere and prove myself elsewhere."

Pearce took charge of 97 games at City, with 34 wins, 43 losses and 20 draws.