A statement on the club's website said Brown had been "relieved of his managerial duties and placed on gardening leave with immediate effect. Brian Horton and Steve Parkin will take charge of first-team duties until further notice".
The statement continued: "We would like to place on record our sincere thanks to Phil for the major success achieved during a period of four seasons in charge at the club and wish him every success for the future.
"Promotion to the Premier League in 2008 and retention of our status on the last day of the 2009 season are unique events in the history of Hull City and both were achieved under Phil's stewardship during a period which will never be forgotten by all connected with the club.
"However, the retention of Premier League status is paramount and the board believes that a change in managerial direction is the correct option at this time."
Hull, close to going out of business 20 years ago and languishing in League Two only six years ago, were taken into the Premier League by Brown in one of the great fairytales of the modern game.
Having gone up they defied the odds and stayed up last season, clinging on at the end after a dizzying start to Premier League life that brought wins over Arsenal, Fulham and Tottenham Hotspur, a draw at Liverpool and a memorable day at Old Trafford when they pushed Manchester United all the way before losing 4-3.
Brown, outspoken and sometimes controversial - he kept his players on the pitch for their half-time team talk after a woeful first-half display against Manchester City last season - has had a rougher ride this season as Hull's performances on the pitch have mirrored on-going problems in the boardroom.
It has been a struggle from the beginning though and, with nine games remaining, Hull are second-last on 24 points, three points adrift of safety.
Last Saturday's injury-time 2-1 home defeat by Arsenal appears to have been the final straw for the board and Horton and Parkin will take over for next weekend's game against bottom side Portsmouth.
Brown issued a statement, through the League Managers' Association (LMA), saying:
“I am obviously very disappointed with the club’s decision and the fact that I will now not have the opportunity to secure Hull City’s status in the Barclays Premier League for a third consecutive season.
"Although I am extremely sad to be leaving Hull City, I am very proud of my achievements during my time as manager, especially having led the team into the top flight of football for the first time in the club’s 104 year history and ahead of schedule.
"It has been a fantastic experience and I would like to offer my sincere thanks to all of the players, past and present, and also to my staff. Finally, I would like to thank the fans for their support and wish the club every success in the future.”
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