The club decided to bring his nine-month stay at the City Ground to an end following Saturday's 1-0 home defeat to Sunderland.
A club statement read: "Academy Manager Gary Brazil has been appointed caretaker manager and has assumed his new duties this morning.
"The club would like to thank Mark, David and Frank for all their efforts during their time at The City Ground."
The 55-year-old was one of the hottest properties in management when he moved to Rangers but his reputation has taken a battering over the last 12 months.
Forest's sporting director Frank McParland, who worked with Warburton at Rangers, was also axed for his part in this season's poor run of results.
Ex-Everton defender David Weir has also been axed from the backroom team.