Bolton announce Lee departure by mutual consent
Lee, 48, was promoted from assistant manager in April after the exit of former boss Sam Allardyce.
But he has had a difficult start to the current campaign as Bolton lie second from bottom of the Premier League with just one league win to their credit.
"This has been a difficult decision for all parties but we have agreed the time is right," Bolton chairman Phil Gartside told the club's website.
General manager Frank McParland has also left the club.
First-team coach Ricky Sbragia could now take temporary charge of the side who face a trip to in-form Arsenal on Saturday.
Gartside added: "Sammy has played an important role in the club's recent history. We wish Sammy and Frank well for the future.
"Our efforts will now be to look for a replacement manager to concentrate on the future."