FC Copenhagen sack Nilsson after six months
Nilsson, a Swede, took over from Norwegian coach Staale Solbakken in June 2011.
FC Copenhagen currently lead the league, four points ahead of FC Nordsjaelland, but did not get past the group stages of the Champions League.
"We have had to realise that there hasn't been an understanding between FC Copenhagen and Roland Nilsson about how to take the team further and therefore our paths have to part," the club's chief executive Anders Horsfolt said in a statement.
Nilsson opposed the club's sale of midfielder William Kvist to Stuttgart during the transfer window this year.
The club said FC Copenhagen's sports director Carsten Jensen would act as manager in the meantime.