The club said in a statement on Monday that first team coach John Metgod had also left, with director of youth operations Paul Hart appointed caretaker coach.
Former England captain Adams, 42, had been in charge at Fratton Park for just over three months after taking over when Harry Redknapp joined Tottenham Hotspur.
"This has been a very difficult decision and Tony has worked tirelessly to arrest the slump in form," the club said in a statement.
"He is rightfully highly-respected within the football world and played a major role in our FA Cup triumph last season.
"The owner and board feel they have been as supportive as they can during a period where results have been poor. The team has played well but too many points have been dropped from winning positions.
"The priority for Portsmouth Football Club is to remain in the top flight and we feel the appointment of a new manager will give us the best opportunity to enable us to do this."
He broadened his knowledge of the game during a spell as a trainee coach with Dutch side Feyenoord and joined Redknapp's coaching staff at Portsmouth in 2006 as assistant manager.
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