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.
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."
