Ince, the Premier League's first British black manager, was in charge at Ewood Park for six months. Rovers have suffered six consecutive league defeats and sit five points from safety in the relegation zone.
"It is with great sadness that the board announce that Paul Ince is to leave the club," Rovers chairman John Williams said in a club statement.
"Three wins in 17 games has seen a squad, which finished seventh last season, fall to 19th position. We are currently in real danger in becoming detached from the pack.
"The survival of the club in the Premier League is paramount and our focus now is finding a replacement who will be able to maintain our top division status.
"Paul will bounce back, he is a fighter, and we wish him well."
Rovers began the season with an away win at Everton but picked up just two further league victories, the last in late September, as their form deteriorated and the final straw for the club's board came with a 3-0 defeat at Wigan Athletic on Saturday.
Williams said that the club "had been desperate for Ince to succeed" but told Sky Sports News that "it was time to change in order to help the club secure its status."
Former Rovers manager Graeme Souness is the bookmakers' favourite to replace Ince at Ewood Park, with former Bolton Wanderers and Newcastle United manager Sam Allardyce also linked with the position.
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