"Sporting's board informs that it has terminated its contract with coach Paciencia and that Ricardo Sa Pinto will now assume the role of head coach until June 2013," Sporting said in a statement.
Domingos arrived at Sporting in the close-season and made wholesale changes to the club's ageing squad, but he succumbed to growing pressure, failing to please the fans and board who longed for their first Portuguese Premier league title in a decade.
After a shaky start to the season, Domingos' side went on a run of seven consecutive wins which ended with a defeat by city rivals Benfica in November.
That spell ignited fans' hopes but the team, affected by injuries to key players, hit another poor stretch in January and have won only one match this year.
Saturday's defeat left Sporting trailing fourth in the league, 16 points adrift of leaders Benfica and 11 behind second-placed Porto after 18 matches.
One of Portugal's 'Big Three' - alongside neighbours Benfica and the domineering Porto - Sporting have disappointed in recent years, failing to win the title since 2002 and missing out by a mile in the last two seasons, when they finished 28 and 36 points adrift of the champions.
Domingos had previously guided unfancied Braga to second place in the domestic league and to last year's Europa League final, which his side lost to Porto.
Sporting have reached Portugal's cup final, unlike Porto and Benfica, and will play Legia Warsaw in the Europa League this week.
Sa Pinto was a striker for Sporting and a Portuguese international. He previously coached Sporting's youth teams.
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