Livorno sit 19th in the Italian top flight following four straight league defeats, the latest coming in the form of a 3-0 home loss to Parma on Saturday.
The Tuscany outfit have won just three league games all season under Nicola, losing 12 of their 19 Serie A encounters so far.
And, after president Aldo Spinelli admitted that he was considering Nicola's position, the club have now parted company with the 40-year-old, who guided Livorno to promotion from Serie B last term in his first season in charge.
A statement on Livorno's official website read: "AS Livorno Calcio announces that it has dismissed Davide Nicola as first-team coach.
"The club extends its warmest thanks to the coach for his commitment, professionalism and dedication."
Technical director Attilio Perotti, who salvaged the club's second-tier status in the 2011-12 season, could be set to return to the dugout after Spinelli expressed an unwillingness to appoint anybody from outside the club.
Livorno will start life after Nicola on Saturday with a trip to title challengers Roma.
‘I don’t think Liverpool would look at Ollie Watkins, a striker isn’t a pressing issue for them – it’s Arsenal who need one’ Former Reds star explains why his old club don’t need an out-and-out forward this summer
‘He’ll still be playing at 40 at a good level because he’s in such good shape and looks after himself so well. He does everything to be a top professional’: Ex-Liverpool coach insists Mohamed Salah has plenty more miles in the tank
