Mel had been with the club since 2010 and took them back to the top flight in the 2010-11 season before securing UEFA Europa League qualification last season.
However, while Betis sit second in Group I of the competition, their domestic form has been poor this campaign.
Mel leaves the club bottom of the pile, two points off 19th-place Almeria. Betis also suffered a painful 4-0 derby defeat against Sevilla in November.
In a statement on their official website, Betis said the decision was due to the "delicate situation" on the field as well as "the need to change the dynamics of results".
Roberto Rios and David Gomez, members of Mel's backroom staff, have also left the club.
Betis travel to Club Lleida Esportiu in the Copa Del Rey on Friday.
