Villa are currently 12th in the Sky Bet Championship after winning just three of their first 11 league games this season.
Bruce had come under increasing pressure after Villa’s poor start to the season and had a cabbage hurled at him during Tuesday night’s home draw with Preston.
“Aston Villa Football Club can confirm that manager Steve Bruce and his assistants Colin Calderwood, Steve Agnew, Stephen Clemence and Gary Walsh are leaving their posts with immediate effect after having their contracts terminated,” the club said on their official website.
“The process to appoint a new manager is under way. In the meantime, Kevin MacDonald, Aston Villa Under-23s manager, will be in charge of the team for our trip to Millwall on Saturday.”
Bruce, who has won promotion to the Premier League with two different clubs – Birmingham and Hull City – replaced Roberto Di Matteo in October 2016.
Among the early names linked with the job are Thierry Henry, who investors Wes Edens and Nassef Sawiris reportedly wanted in the summer, Brentford manager Dean Smith, former Inter Milan boss Andrea Stramaccioni, Claudio Ranieri and Shakhtar Donetsk boss Paulo Fonseca.
Former Sheffield United, Huddersfield, Wigan, Crystal Palace and Sunderland boss Bruce guided Villa to the play-off final last season, but they were beaten 1-0 by Fulham and the club’s failure to return to the top flight left them financially vulnerable.