Allardyce, 56, was relieved of his duties along with his assistant Neil McDonald by the club’s new owners, the Venky’s Group from India.
Rovers have lost three of their last five games, including a 2-1 defeat by his former club Bolton on Sunday.
“I am very shocked and disappointed to be leaving Blackburn,” said Allardyce in a statement released through the League Managers’ Association.
“I am extremely proud to have managed this club and I enjoyed a fantastic relationship with the players, my staff and the supporters during my time in charge.
“I now wish them and the football club every success for the future.”
Rovers are currently 13th in the Premier League, five points above the relegation zone.
The club announced that the first-team coach Steve Kean will take temporary charge of the club.
Former Bolton and Newcastle manager Allardyce joined Blackburn in December 2008 and guided the Lancashire club to a respectable 10th place in the Premier League last season.
The club made a steady start to the current campaign, taking 18 points from 14 games to leave them 11th in the Premier League at the end of November.
But a poor run of recent results, including a 4-2 defeat by Tottenham and a 7-1 loss at Manchester United, have seen Rovers slide closer to the relegation zone.
However, had the club taken three points against 10-man Bolton on Sunday, they would have moved to sixth in the Premier League.
Blackburn captain Ryan Nelsen said he learned of Allardyce’s sacking after receiving a text from a reporter in his native New Zealand.
It is coming to the time of the season when troubleshooters are required, and Allardyce is sure to get the call sooner rather than later
“Not in my wildest dreams did I see this coming, nor did anyone else because of the job he has done since he has come to Blackburn,” he told BBC Radio 5 live.
“When he took over, it was a club that was absolutely in diabolical trouble and he turned it into a very efficient, streamlined club that has spent no money and has done extremely well.
“A huge big leadership has gone from the club and the Premier League is unforgiving if you don’t have anyone directing the ship.
“They [Venky's] have a plan for the club – they must to have made a decision like this. But it’s ruthless.
“I feel gutted for the man, the players liked him, the club liked him.”
Blackburn striker Morten Gamst Pedersen added on his personal website : “The table situation does not reflect on how our performance has been in this year’s Premier League season.”
The Rao family completed their £43m takeover of Rovers through their newly formed company, Venky’s London Limited, on 19 October.
I’ve not met the owners formally – Allardyce
And Venky’s chairwoman Anuradha Desai had told the BBC last month that the group had “promised manager Allardyce funds to spend in the January transfer window”.
But in a statement on Monday, the club said: “We have taken this decision as part of our wider plans and ambitions for the club.
“We would like to put on record our thanks to Mr Allardyce for his contribution to Blackburn Rovers Football Club.”
Allardyce earned his reputation with Bolton, guiding the club to the Premier League in 2001 as well as helping the Trotters to their first appearance in Europe in 2005.
He resigned after eight years at the Reebok Stadium in April 2007, joining Newcastle the following month.
But his tenure at St James’s Park lasted just 24 matches and he left in January 2008.
606: DEBATE
Unless they have someone lined up and are prepared to back them in January, then this is a ridiculous decision
Unless they have someone lined up and are prepared to back them in January, then this is a ridiculous decision
Wilsbowski
After 11 months out of football, Allardyce joined Blackburn in December 2008 after Paul Ince was sacked with the club lying second bottom of the Premier League.
Under Allardyce’s guidance, Rovers finished 15th in 2009. Last season he steered them to the Carling Cup semi-finals in which they lost 7-4 on aggregate to Aston Villa.
Richard Bevan, the chief executive of the LMA, said: “When new owners take over a club, sadly, the manager’s position often hangs by a thread.
“To Sam’s great misfortune this has now happened twice and, on both occasions, it has been extremely difficult to understand the thinking behind the dismissal.
“It is ironic that one minute Sam can be proposed as the next England manager and the next, he finds himself out of work.”
The club have not indicated when a new manager will be appointed.
Former Tottenham boss Martin Jol, who resigned as Ajax coach last week, ex-Aston Villa and Leicester City manager Martin O’Neill and former Rovers player Alan Shearer have been linked with the Ewood Park job.
Source: www.nairabrain.com
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