Liverpool have terminated the contract of manager Kenny Dalglish after a season in which the club finished in eight position in the Premier League.
Dalglish, having enjoyed a hugely successful first stint on Merseyside as he lifted three league titles, was reappointed as Liverpool manager in January 2011 after the club sacked Roy Hodgson.
In a joint statement on the clubs official website, it said: "Fenway Sports Group and Liverpool Football Club announce that Kenny Dalglish is to leave his post today as manager after having his contract terminated.
"After a careful and deliberative review of the season the club came to the decision that a change was appropriate. It is not a decision that was reached lightly or hastily. The search for a new manager will begin immediately."
The 61-year-old Scot manager speaking in a report said: "It has been an honour and a privilege to have had the chance to come back to Liverpool football club as manager. I greatly appreciate the work that Steve, Kevin, the players and all of the staff put in during my time and feel proud that we delivered the club's first trophy in six years winning the Carling Cup and came close to a second trophy in the FA Cup Final.
"Of course I am disappointed with results in the league, but I would not have swapped the Carling Cup win for anything as I know how much it meant to our fans and the club to be back winning trophies.
"Whilst I am obviously disappointed to be leaving the football club, I can say that the matter has been handled by the owners and all concerned in an honourable, respectful and dignified way and reflects on the quality of the people involved and their continued desire to move the football club forward in the same way as when they arrived here.
"I would like to thank all of the staff at the club for their effort and loyalty. I said when first approached about coming back as manager that I would always be of help if I can at any time and that offer remains the same.