Lampard, who led Chelsea to a top-four finish and the FA Cup final in his debut 2019/2020 campaign in charge, did not get the best out of his squad this season.
This was in spite of the club spending more than 220 million pounds (301.11 million dollars) on new recruits.
He departs less than 24 hours after Chelsea beat Luton Town 3-1 on Sunday to reach the 2020/2021 FA Cup fifth round.
“This was a very difficult decision for the Club, not least because I have an excellent personal relationship with Frank and I have the utmost respect for him,” Chelsea owner Roman Abramovich said in a statement on the club’s website.
“He is a man of great integrity and has the highest of work ethics. However, under current circumstances we believe it is best to change managers.”
“Reports that Frank Lampard will be sacked by Chelsea today,” former England international Gary Lineker said on Twitter shortly before the announcement, “….. utterly ludicrous after his first bad run.
“It was always going to need time, given so many new signings feeling their way into a new club. Patience being a virtue is seldom recognised in this sport. They never learn.”
Lampard is a former midfielder who won three Premier League titles and the UEFA Champions League and is the club’s record goalscorer.
He becomes the 12th Chelsea manager to be fired since Russian billionaire Roman Abramovich bought the club in 2003.
The 42-year-old was hired in 2019 following a stint with Championship (second-tier) club Derby County.
He won praise last season after inheriting a squad that could not be strengthened due to a FIFA-enforced transfer ban which was eventually lifted.
While most clubs restricted their spending due to the financial impact of the COVID-19 pandemic, Chelsea spent more than any other English club to sign players.
They signed players such as Kai Havertz, Timo Werner, Ben Chilwell, Hakim Ziyech and Edouard Mendy.
A 17-match unbeaten run in all competitions appeared to reinforce Lampard’s credentials as they qualified for the 2020/2021 UEFA Champions League knockout stages as group winners.
This was achieved while sitting third in the league.
But Chelsea’s form began to implode midway through December and they have plummeted down the standings after two wins in their last eight league games.
This was underlined by Tuesday’s 2-0 defeat by Leicester City.
Lampard has also struggled to get the best out of German forward Werner, while 71 million-pound midfielder Havertz has also struggled to settle in England, especially after a brush with COVID-19.
Former Paris St-Germain (PSG) manager Thomas Tuchel is the favourite to replace Lampard, according to British media reports.
Chelsea, who are ninth in the standings on 29 points from 19 games, 11 points behind leaders Manchester United, host Wolverhampton Wanderers on Wednesday.
