Allardyce leaves the club, who have just been taken over by Indian chicken company Venky's, in 13th position in the Premier League. Chris Hughton, sacked by Newcastle last week, is among the early favourites to take over.
A statement on the Blackburn website read: ''The Venky's Group, owners of Blackburn Rovers Football Club, has today [Monday] confirmed the departure of manager Sam Allardyce and assistant manager Neil McDonald with immediate effect.
''First team coaching duties will be taken on by Steve Kean [currently 1st team coach] for the immediate future.
''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 said in a statement: "I am very shocked and disappointed to be leaving Blackburn Rovers. 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."
Poultry firm Venky's finalised their purchase of the 99.9% shareholding of the Jack Walker Trust for £43 million (taking into account club debts which will be paid off) a month ago and owners, the Rao family, initially spoke of setting only modest, realistic targets for Rovers.
One bookmaker did reveal a flurry of sizeable bets on Allardyce to be the next top-flight manager to vacate his post and slashed odds from 33/1 to 3/1 on Monday.
Rovers lost 2-1 to ten-man Bolton at the weekend, with Allardyce accusing his players of ''defending like a bunch of old women". However, that defeat still left them five points clear of the bottom three and in no obvious danger.
Richard Bevan, chief executive of the League Managers Association, 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.
"He is widely acknowledged within the game as one of the most progressive and forward thinking managers, embracing new concepts and technologies to create an environment which leads to success for his club. It will not be long before Sam, with his exceptional management experience, is back in a managerial post."
