A six-match unbeaten run at the start of the campaign lifted Blackpool to the top of the table, but the north-west club have won just three of their last 20 league outings.
Their recent form has been particularly dismal, with Ince's men claiming just one point from 10 Championship fixtures.
Ince's fate was sealed by a 2-0 defeat at bottom club Barnsley on Saturday and he has now been relieved of his duties together with assistants Steve Thompson and Alex Rae.
Blackpool midfielder Barry Ferguson, a former Scotland international, has been placed in charge of first-team affairs.
A statement on the club's website on Tuesday read: "Blackpool Football Club can confirm that manager Paul Ince and assistants Alex Rae and Steve Thompson have had their contracts terminated with immediate effect.
"Barry Ferguson will take charge of training when the players return on Thursday.
"A further announcement will be made in due course."
Blackpool turned to Ince last February following the short tenure of former incumbent Michael Appleton, who was at the helm for just nine weeks.
The club finished 15th in the Championship last season, just five points above the relegation zone, and are 14th at present.
