The island club lie second bottom of the Primera Division with 17 points from 22 games after four successive defeats and have taken action in a bid to turn their season around.
The club's statement read: "RCD Mallorca and Joaquin Caparros, seeking the good of the club, have reached an agreement Monday to end their contractual relationship."
Club president Llorenc Serra Ferrer added: "It is a difficult time for Mallorca and for me too, it's hard to have to give this news.
"This morning we talked to the coach Joaquin Caparros on the situation that the team was going through, and have come to the conclusion of the need to push forward to the remainder of the competition and be able to achieve the objective which is nothing to keep the team in the First Division."
Caparros himself said: "No professional will ever be happy about a decision like this.
"I'm hurt, because I also felt the support of the fans until the last moment and the support of a group of players I'm sure will push through the situation.
"I have grown at Mallorca not only as a coach but as a person. We've all been very close, we have tried to find answers. I appreciate the opportunities given to me and the coaching staff. Thank you all."
The experienced Caparros was appointed at Mallorca in October 2011 and saw them to an eighth-placed league finish last season.
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