Sunderland lost 1-0 at home to Manchester United earlier in the day to leave them one point above the relegation zone.
"Sunderland AFC has announced that it has parted company with manager Martin O'Neill this evening," the north-east club said on their website.
"The club would like to place on record its thanks to Martin and wishes him well for the future. An announcement will be made in the coming days regarding a successor."
O'Neill joined Sunderland in 2011 after managerial stints at several clubs including Leicester City, Celtic and Aston Villa.
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