Winning Europe's elite club competition had been a burning desire for Roman Abramovich since the Russian billionaire took over as the owner at Stamford Bridge in 2003.
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Di Matteo found the 'Holy Grail' against all the odds in May but Tuesday's 3-0 reverse at Juventus, a defeat that leaves Chelsea on the brink of Champions League elimination, prompted Abramovich to end the reign of his eighth manager at the club.
"The team's recent performances and results have not been good enough and the owner and board felt a change was necessary now to keep the club moving in the right direction as we head into a vitally important part of the season," the club said on their website.
Chelsea, who have won only two of their last eight games in all competitions, added they would be making an announcement shortly regarding a new manager with bookmakers listing former Liverpool boss Rafael Benitez and ex-Barcelona coach Pep Guardiola as early favourites.
"The club faces a difficult task ahead in qualifying for the knockout stages of the Champions League as well as maintaining a strong challenge for the top of the Premier League while competing in three other cup competitions," the club said.
"The owner and the board would like to thank Roberto for all he has done for the club since taking over in March. Roberto helped guide us to an historic Champions League victory and a seventh FA Cup.
"We will never forget the huge contribution he has made to this club's history and he will always be welcome at Stamford Bridge."
GREAT SEASON
Di Matteo was assistant coach before taking over the first team in a caretaker capacity when Portuguese Andre Villas-Boas was sacked in March and he helped turn a mediocre season into a great one.
The Italian inherited a team 3-1 down to Napoli in the first leg of the last 16 of the Champions League but he inspired a thrilling fightback in the second leg.
Chelsea then knocked out Benfica in the quarter-finals before beating overwhelming favourites Barcelona in the semis and defeating Bayern Munich on penalties in the final in the German team's own Allianz Arena stadium.
Di Matteo had also won the FA Cup two weeks earlier by overcoming Liverpool 2-1 in the final at Wembley and the reward for achieving a memorable trophy double was to be elevated to permanent first-team coach at the end of the campaign.
Chelsea backed the Italian
