Forest owner Evangelos Marinakis left his seat during through the match at the City Ground in an ominous sign for the Australian and his fate was confirmed shortly after full-time.
"Nottingham Forest Football Club can confirm that after a series of disappointing results and performances, Ange Postecoglou has been relieved of his duties as head coach with immediate effect," the club posted on X.
"The club will make no further comment at this time."
It is the shortest managerial reign of any permanent Premier League manager to leave a club during the season.
Postecoglou was only appointed on September 9th but has failed to win a single match in his eight games in charge in all competitions.
Forest collected just one point from his five Premier League matches at the helm, leaving the side one point above the relegation zone in 17th spot.
The club are now on the hunt for a third manager this season after Nuno Espirito Santo was dismissed last month.
Postecoglou, sacked by Tottenham in June, was defiant at his pre-match press conference on Friday, saying if he is given time at a club it always ends "with me and a trophy".
Last season he won the Europa League with Tottenham, in his second season in charge, though a terrible league campaign cost him his job.
Former Burnley and Everton manager Sean Dyche is reportedly in the frame to be the new boss at Forest.
The Chelsea match was an unhappy final chapter in a miserable reign for Postecoglou, 60.