The Berkshire club's form has dipped considerably since starting the season with only two defeats from the opening seven league matches and the thrashing at the weekend proved the final straw for Adkins' tenure.
With only three wins since mid-September, Reading have tumbled down the table and are now 10 points off the play-off places.
Adkins described the loss at St Andrew's as "very poor" and "very disappointing", but his determination to turn the club's fortunes around was not reciprocated by the Reading board, who have opted to terminate his contract with immediate effect.
"The board of Reading Football Club have this afternoon [Monday] relieved manager Nigel Adkins of his duties," a statement read.
"The club met with Nigel in person today and we would like to place on permanent record our thanks to him for his hard work and diligence since his appointment in March 2013.
"Following this weekend's 6-1 defeat at Birmingham, the board feel that a change in manager is necessary, with the club 16th in the Championship.
"As part of this process, assistant manager Andy Crosby and first team coach Dean Wilkins will also be leaving the club, and we would also like to thank them for their efforts."
Adkins was unable to save Reading from relegation from the Premier League following his appointment, but guided them to seventh last season, missing out on a play-off place on the final game.
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