The sacking comes just a week after the Leicester owners gave Ranieri a vote of confidence and just 24 hours following the team's 2-1 defeat against Sevilla in the Champions League.
On the face of it the timing seems strange as despite the defeat in Spain, Jamie Vardy's goal to get Leicester back in the tie had appeared to galvanise the team.
Ranieri won the Premier League with Leicester last season in what has been dubbed as one of the biggest sporting shocks of all time.
However, his team have struggled this term, without a point or a goal in the Premier League in 2017 and recently knocked out of the FA Cup by League One side Millwall.
Leicester released a statement on Thursday night:
“This has been the most difficult decision we have had to make in nearly seven years since King Power took ownership of Leicester City."The statement thanked Ranieri for his time at the club and stressed that a change was needed to help avoid relegation from the Premier League this season.
Assistant manager Craig Shakespeare will take charge of Leicester's next game against Liverpool on Monday night, but the bookies have installed Roberto Mancini as favourite to be the next Leicester City manager.
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