"This was not an easy decision for the board," Wolfsburg's board chairman Francisco Javier Garcia Sanz said in a statement.
"But it was clear that after the negative results of the past weeks we had to act."
"The cooperation with Armin Veh was good and his ties to the team were good," sporting director Dieter Hoeness said.
"Unfortunately the results did not come. This was a source for much insecurity within the team. We were not convinced any more that the situation could change in the near future with Veh."
Wolfsburg's once rock-solid defence is now the second worse in the league, slightly better than bottom-placed Hertha Berlin, while last season's top striker Grafite has netted only five goals.
"The last nine matches without a win and the high number of goals, with 38 goals against us, are clear signs," said Hoeness.
