Southampton chiefs pulled the trigger after agreeing a pay-off with Puel, who had two years left on the deal he signed last summer, and following an end of season review.
Puel led Southampton to the EFL Cup final and an eighth-placed finish.
He hoped that, along with the work he did developing some of the club’s youngsters, would be enough to keep him in a job.
But he paid the price for losing the fans and many of his players.
Southampton and Puel were booed off after the final game of the season against Stoke which meant they finished the season without scoring in their final five home games.
Puel also came under fire for the style of football Southampton played during his reign while many of his players were unhappy with his methods.
A Southampton statement said: “Southampton Football Club can today confirm that it has terminated the contract of Claude Puel with immediate effect.
“Everyone at Southampton would like to express our thanks to Claude for his hard work and commitment this year. The highlight of the season was a memorable day at Wembley in the EFL Cup Final, a day our fans will always treasure.
“We wish Claude well for the future. The search for a new management team is underway. We are confident that we will find the right fit in line with the long term vision of the club.”