Bobby Williamson has left Chester following their 1-0 defeat to MK Dons.
The North West club have been in freefall in recent weeks having won just one of their last 14 games and are now just ten points above the drop zone.
Williamson arrived at the club last summer and had a fine start to the season, but their form has tailed off and the club have opted to sweep the decks.
Simon Davies has been placed in caretaker charge for Tuesday's game at promotion-chasing Darlington.