Lopetegui took over at West Ham in May, agreeing on an initial two-year deal to replace the outgoing David Moyes.
But the Basque native oversaw just seven wins in 22 games, with the Hammers in 14th place in the Premier League and seven points above the relegation zone.
"West Ham United can confirm that head coach Julen Lopetegui has today left the club," a statement read.
"The first half of the 2024/25 season has not aligned with the club's ambitions and the club has therefore taken action in line with its objectives.
"The process of appointing a replacement is underway," West Ham added.
Lopetegui was on the verge of an exit in December after West Ham were beaten by fellow strugglers Leicester.
He was kept in charge but a run of one win in five games following that defeat proved to be the final straw – his last match being Saturday's 4-1 loss at Manchester City.
Lopetegui is likely to be replaced by Graham Potter with reports claiming the former Chelsea boss has held positive talks with the club.
Potter has been out of work since April 2023 after leaving Chelsea just seven months into a five-year deal following a chaotic stint.
The 49-year-old started his managerial career at Ostersund in Sweden and had spells with Swansea and Brighton before taking over at Stamford Bridge.
West Ham are next in action on Friday when they travel to Aston Villa in the FA Cup, before hosting Fulham in the Premier League on Saturday.