Middlesbrough said they "would like to place on record their sincere thanks to Tony Mowbray for all of his substantial efforts, dedication and integrity".
Boro have won only one of their last 10 league games and Saturday's defeat at Barnsley leaves them 16th in the table.
Their solitary win in the last 10 was a 4-1 home victory over bottom club Yeovil and Middlesbrough lie only four points above the relegation zone, and 10 points away from the play-offs.
They went out of the Capital One Cup in the first round in August after a 2-1 home defeat by League Two side Accrington Stanley.
Mowbray started his playing career with Boro in 1982 and was named captain aged 23. He led them back to the top flight in 1988 via consecutive promotions and in total amassed 348 league appearances in a nine-year spell.
He retired as a player in 2000 and after stints managing Hibernian, West Bromwich Albion and Celtic he returned to Teesside almost exactly three years ago.
In his first full season he led the club to seventh in the Championship and last term they were well placed for a promotion push before a dramatic loss of form meant they finished in 16th place.