The Italian took over from Martin O'Neill in March but after no wins from their opening five Premier League matches he has now paid the price.
During his five months at the Stadium of Light, the 45-year-old saw his side win just twice - against Everton and Newcastle - collecting nine points from 12 league matches and scoring 11 goals while conceding 22.
That left him with a win rate of 17 per cent - the worst of any Sunderland manager to oversee more than 10 games since Howard Wilkinson was in charge of the club a decade ago.
At the end of last season, Di Canio was backed by the club's board to strengthen his squad - bringing in 14 players and spending over £23million in the process during the close-season.
However, the poor start to the season has seen the former Swindon Town boss leave his revamped squad just two days before a League Cup clash with Peterborough United.
A statement from the club on Sunday read: "Sunderland AFC confirms that it has parted company with head coach Paolo Di Canio this evening (Sunday).
"Kevin Ball will take charge of the squad ahead of Tuesday night’s Capital One Cup game against Peterborough United and an announcement will be made in due course regarding a permanent successor.
"The club would like to place on record its thanks to Paolo and his staff and wishes them well for the future."
The announcement comes just 24 hours after Sunderland were comfortably beaten 3-0 by West Brom at the Hawthorns, a third consecutive defeat in the league.
