Madrid - Real Madrid president Florentino Perez has said on Monday that coach Carlo Ancelotti had been sacked, and that his replacement will be named next week.
"It has been a difficult decision, but we are not here to take easy decisions," Perez said.
Ancelotti was under contract until 2016. This is the ninth time that Perez has sacked a coach during his tumultous 12-year reign.
"We think this is the best for Real Madrid. Carlo is now part of our history, but we have to be demanding and we think this is the right moment to make a change in order to win more trophies."
Perez thanked Ancelotti for "all his hard work at this club. This is a very demanding club, and we think we need a new direction in order to be even more competitive."
The sacking is controversial because Ancelotti is extremely popular among the players and fans.
World player Cristiano Ronaldo said Sunday he hoped to continue working with Ancelotti, while midfielder Luka Modric on Monday called him "the ideal man for the job."
Online polls have shown a large majority of Real fans in favour of sticking by Ancelotti, despite his lack of success this spring.
Ancelotti was in charge at Real for two seasons. He won the club's 10th Champions League last season and the Club World Cup in December, but his expensive team failed to win any trophies this spring.
Real were knocked out of the Champions League at the semi-final stage by Juventus, finished two points behind Barcelona in La Liga and were ousted from the Spanish cup by neighbours Atletico.
According to media reports, the candidates to succeed him are Rafa Benitez, Unai Emery, Michel and Jurgen Klopp.