Rovers have won just once since Berg took over from Steve Kean, a run of form that has seen them slide down to 17th in the Championship table.
The 1-0 defeat to Middlesbrough on Boxing Day - a fifth loss in their last six games - was the final straw for the club's Indian owners, who have also dismissed assistant boss Eric Black and two other coaches.
A club statement read: "Blackburn Rovers FC has announced the departure of manager Henning Berg, assistant manager Eric Black, first team coach Iain Brunskill and goalkeeping coach Bobby Mimms with immediate effect.
"This decision has been taken following a very disappointing sequence of results.
"The club thanks the four men for their efforts and wishes them every success for the future."
Berg, 43, signed a three-year contract on October 31 as he took over from Kean - but he has become the second managerial casualty at the club in two months.
He played over 200 times for the Ewood Park club in the 1990s before joining Manchester United.
Berg's time at Ewood Park was hardly a happy one, with a statement released earlier this month playing down claims that he had stormed out of the club's Christmas party after an alleged bust-up.
Former boss Mark Hughes is the strong favourite with Sky Bet to replace Berg from Alex McLeish, Roberto Di Matteo and Billy Davies.