Bolton sacked manager Owen Coyle on Tuesday after the Championship club's poor start to the season hit a new low with a defeat at struggling Millwall on Saturday.
Coyle was already under pressure following last season's relegation from the Premier League and he has been unable to improve the team's results in English football's second tier.
Bolton sit just above the relegation zone in 18th position after the last-minute loss at Millwall left them with only three wins from their first 10 matches.
Coyle admitted after the match that he would understand if Bolton wanted to sack him and, following talks with chairman Phil Gartside on Monday, the former Burnley boss and his backroom staff have been dismissed.
"Owen poured his heart and soul into the job, both on and off the pitch, and he led our club with great dignity during some very challenging times," Gartside said.
"It is the right time for a change. We set a target at the beginning of the season and want to get back on track.
"I would like to place on record our sincere thanks to Owen, Sandy Stewart and Steve Davis for all their hard work during their time at Bolton Wanderers."
Coyle left Burnley in January 2010 to take the Bolton job on a two-and-a-half-year contract and he managed to keep the club in the Premier League in his first season.
However, Bolton were unable to beat the drop last season and that effectively sealed the Scot's fate.
Coyle, who played for Bolton between 1993 and 1995, said: "I have always been driven to act in the best interests of the club and care passionately about it.
"I had fantastic times here as a player and it has been a privilege to have held the post of manager.
"I want to thank the fans for their backing since I returned, the chairman Phil Gartside and the owner Eddie Davies for their support and friendship and the club's staff and players for all their effort and commitment.
"I wish everyone connected with Bolton Wanderers all the very best."
Academy manager Jimmy Phillips and head of academy coaching and development Sammy Lee will take temporary charge of Bolton while Gartside looks for a new boss.
Former Wolves and Sunderland manager Mick McCarthy is among the leading contenders to replace Coyle.