Warnock, who was appointed in March 2010 and won 33 of his 84 matches in charge, guided the West London club back to the Premier League for the first time in 15 years last season.
Malaysian owner Tony Fernandes said in a club statement: "Sadly a recent run of poor form has seen us slip alarmingly down the table and the board felt it was the right time to make a change.
"Neil Warnock has acted with honesty, professionalism and integrity throughout his time at the club and I would personally like to thank him for his significant contribution to Queens Park Rangers over the last 22 months.
"I genuinely wish him all the very best for the future and he will always be welcome back at Loftus Road."
Vice-chairman Amit Bhatia said the announcement was made "with a heavy heart" while Fernandes told his 147,000 Twitter followers that it was "a sad day for me too."
"Trust me in my 47 years of life I have never had to make such a tough decision," he added.
Chief executive Philip Beard told Sky Sports television that staying in the Premier League was key to the club's ambitions and they would move swiftly to appoint a new manager.
"I understand the fans are going to have a mixed reaction to this," he said of Warnock's departure. "Our intention will be to bring somebody in who can grow the club and fulfill ambitions."
Former Fulham and Manchester City manager Mark Hughes was installed as the 6/5 favourite by London bookmakers William Hill, who quoted former Liverpool boss Rafa Benitez at 11/4 and former West Ham manager and Chelsea player Gianfranco Zola at 11/2.
QPR began the season reasonably well and were ninth in the table in the middle of November, but having taken just two points from a possible 24 since then are now just one point and one place above the relegation zone.
In all they have won only four of their 20 League matches with only one victory at Loftus Road, when they beat Chelsea 1-0 in October.
Ironically they were drawn to play Chelsea in the FA Cup fourth round - if they win their third round replay against League One Milton Keynes Dons after drawing 1-1 with them on Saturday.
Warnock's sacking was announced shortly after the draw was made.
They were close to losing to MK Dons on Saturday before a late goal by Heidar Helguson gave them a 1-1 draw and saved them from an embarrassing defeat.
Warnock said in a statement "Obviously I am very disappointed but having achieved so much I leave the club with a great sense of pride."
QPR said assistant manager Mick Jones and first-team coach Keith Curle had left with Warnock.
