A statement from the club read: "Palermo announces it has dismissed Walter Zenga as coach of the first team.
"The club wishes to thank Zenga for the work done and wishes him the best of luck in the future."
Zenga replaced Davide Ballardini in the summer and was under contract until June 2012.
He had been given a vote of confidence ahead of yesterday's game only for club president Maurizio Zamparini to change in his mind.
An early favourite for the hotseat is former Lazio coach Delio Rossi.