However, chairman Ron Martin says that he still wants Sturrock to lead the League Two side out at Wembley on 7 April, when they will take on Crewe in the Johnstone's Paint Trophy final.
Sturrock had been in charge since the summer of 2010 and led Southend to the play-offs last season, but their form has been poor since they reached the JPT final and they have slipped to ninth place, six points off the play-offs.
Martin released a very lengthy statement on the Southend website, explaining his decision to dispense with the services of Sturrock.
The statement read, in part: "The decision I have had to make today was a very hard call but one I instinctively know is correct and in the best interests of Southend United.
"Most people associated with the club are currently thinking of the day out at Wembley and 7 April will be a special day in the club's history, a day for the town of Southend.
"I too will look forward to our day out but, as chairman, my responsibility and focus must also be on the wider interests of Southend United.
"The primary objective last season and again this season was promotion. We came up short last season and the recent results against relatively lowly teams have not been good enough. Two points out of 15 is poor by any standard.
Form has dropped off
"Our investment has enabled the manager to have more quality players at his disposal than most teams in the League. However the form, just as it did last season, has dropped off when we should have been pushing for automatic promotion.
"Paul Sturrock's three-year contract comes to an end this season and the club will not be renewing it.
"No matter how much I personally wrestle with the positive arguments (Paul is experienced, a nice man, honest and likeable) my responsibility is to bring success and growth to your club.
"If the club were to appoint a different manager during the close season the new man would have no opportunity to assess the ability of the current squad and we would start next season with uncertainty.
"The club needs to hit the ground running from day one with absolute focus on the task in hand, so the club will appoint a new manager tomorrow to ensure the club's interests are protected and advanced both now and from the first day of next season.
"The decisions here are driven by the wider interests of Southend United while remaining conscious of what is fair and just. These may not be sentiments common to football but it is the way I want this club to be run.
"For all these reasons, I have suggested to Paul he leads the team out and manages them at Wembley. He has earned that privilege and has agreed."
The former Hull and Preston manager Phil Brown is being reported as the favourite to take charge at Roots Hall.