The 47-year-old was in his second spell at the club after leading them to the 1995 Cup Winners Cup crown during his first seven-year stint at the helm.
"Real Zaragoza would like to communicate to all its fans and the media that on the night of Sunday, January 13 the club's board met to analyse the team's situation," it read.
"Afterwards, a meeting took place with coach Victor Fernandez in which it was decided by mutual agreement between the club and the coach to revoke his contract.
"Real Zaragoza wishes to express its acknowledgement and gratitude for the effort and professionalism of Victor Fernandez and all his coaching staff."
The former Porto coach was in his second season at Zaragoza and took them to sixth spot in La Liga last campaign, but has failed to lead his team to victory since October.