The Portuguese champions sit nine points behind Primeira Liga leaders Benfica and are without a win since February 16.
Fonseca's exit was announced on Wednesday, with Porto revealing Luis Castro, coach of the club's B side, will take over as interim boss.
A defiant Fonseca promised to keep on fighting after the team suffered a first home league loss in more than five years at the hands of Estoril last month.
However, he was unable to turn things around, with his side mustering draws against Eintracht Frankfurt in the UEFA Europa League - in a tie that saw them progress on away goals - and Vitoria Guimaraes in the Primeira Liga.
A statement on Porto's official website said they had “reached an agreement with Porto's head coach, Paulo Fonseca, to terminate his duties. The administration council also decided that Luis Castro, responsible for the B team, will fill the gap on a temporary basis".
Fonseca took charge in June, with Porto having won the title in the three seasons prior to his appointment.
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