Allardyce's Blackburn slumped to a 2-1 defeat against 10-man Bolton on Sunday, with the Trotters Stuart Holden scoring the winner just 10 seconds after Blackburn equalised minutes from time. The result meant that Blackburn have now lost three of their last five games, though they still remain five points clear of the drop zone.
Allardyce has been relieved of his duties with immediate effect by the new Blackburn owners, India's Venky's group, who released the following statement:
"The Venky's Group, owners of Blackburn Rovers Football Club, has today confirmed the departure of manager Sam Allardyce and assistant manager Neil McDonald with immediate effect.
First team coaching duties will be taken on by Steve Kean (currently 1st team coach) for the immediate future.
We have taken this decision as part of our wider plans and ambitions for the club. We would like to put on record our thanks to Mr Allardyce for his contribution to Blackburn Rovers Football Club."
Allardyce is reported to be already in talks with West Ham over a potential move to the club, with Avram Grant's position looking increasingly vulnerable. West Ham are rooted to the bottom of the Premier League with just 12 points from 17 games.
"I am very shocked and disappointed to be leaving Blackburn Rovers," Allardyce has stated.
"I am extremely proud to have managed this club and I enjoyed a fantastic relationship with the players, my staff and the supporters during my time in charge. I now wish them and the football club every success for the future."