The club released a statement this afternoon confirming his dismissal with the Sicilian club lying 19th in the Serie A table.
They have not won in nine league games and also crashed out of the Coppa Italia having lost at home to Serie B side Hellas Verona.
The statement read: "Palermo announces that it has dismissed first-team coach Gian Piero Gasperini.
"The name of the new coach will be announced by tomorrow morning."
The final straw for club owner Maurizio Zamparini, a man not renowned for his patience with coaches, was Sunday's 2-1 defeat at home to Atalanta.
Gasperini took over in September following the dismissal of Giuseppe Sannino.
He is expected to be replaced by Alberto Malesani, the former Fiorentina boss who was twice sacked by Genoa last season.
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