... after two-and-a-half years in charge of the Bluebirds, with owner Vincent Tan claiming the decision was down to the Scot airing the club's "dirty linen" in public.
The 41-year-old's exit had been widely predicted after Tan last week sent him an email demanding he resign or be sacked.
That ultimatum was briefly lifted when chairman Mehmet Dalman stated Mackay would be in charge for the "forseeable future", but the 3-0 Boxing Day defeat against Southampton proved the ex-Watford boss' last in charge.
A statement on the Cardiff website read: "The board of directors at Cardiff City Football Club have today relieved Malky Mackay of his duties.
"A new first-team manager will be appointed and announced in due course."
Mackay has often said he has felt sorry for the club's fans as Cardiff have found themselves in the headlines for the wrong reasons on several occasions.
But Tan laid the blame for that firmly at his former manager's door in a statement released to Sky Sports News.
"There has been a good deal of publicity generated by, and about, Mr Malky Mackay for the last few months," it read.
"Indeed, far too much dirty linen has been exposed to the public gaze but, I stress, not by me.
"Indeed, I have deliberately not responded to this, hoping that the club can be judged on its football rather than personalised arguments about who said what to whom.
"I have, however, regretfully concluded that it is no longer fair to the club, its players, its fans and the public more generally for this uncomfortable state of affairs to continue.
"Cardiff City Football Club means far too much to us all for it to be distracted by this."
The club later announced that David Kerslake and Joe McBride will take charge of Cardiff for Saturday's Barclays Premier League clash with Sunderland.