Defeat to West Brom at The Hawthorns on Saturday left the Wearsiders bottom of the Premier League with just one point from the opening five games.
The club confirmed on Sunday evening that they had "parted company" with Di Canio but it is understood that Saturday's 3-0 loss, which saw the Italian face up to angry fans at the whistle, forced Stadium of Light chiefs to act.
A statement on the club's official website read: "Sunderland AFC confirms that it has parted company with head coach Paolo Di Canio this evening.
"Kevin Ball will take charge of the squad ahead of Tuesday night's Capital One Cup game against Peterborough United and an announcement will be made in due course regarding a permanent successor.
"The club would like to place on record its thanks to Paolo and his staff and wishes them well for the future."
The former Swindon boss succeeded axed Martin O'Neill with just seven games to go in late March but oversaw only two Premier League victories during his tenure.
Sunderland scraped to safety, finishing 17th, but Di Canio's appointment prompted tumult as critics cited reports of his alleged fascist sympathies, forcing the club into a robust defence of their new man.
Di Canio repeatedly spoke of his desire to "revolutionise" Sunderland but changes to backroom staff, a tough new fitness regime and the influx of 14 new players in the summer failed to yield results.
He had remained bullish after defeat at The Hawthorns, saying: "I absorb the insults as it's part of the game - if I was in (the fans') position I'd be furious.
"My head is up, I won't give up. One game, one win, will clean all the players' brains from the problems they have now."
Sky Bet swiftly installed former Chelsea boss Roberto Di Matteo as the favourite to replace Di Canio, with Gus Poyet also a frontrunner.
Uncle mungo....at least you took moyes off the market, thats one bullet dodged.- als_seaham