Cooper, 44, had been an unpopular appointment to succeed Enzo Maresca in June due to his past with local rivals Nottingham Forest.
He won just two of his 12 Premier League games in charge to leave Leicester perilously poised above the drop zone.
The final straw came as Chelsea won 2-1 in Maresca's return to the King Power on Saturday.
First team coach Ben Dawson will take temporary charge while the club conclude the search for a successor.
Cooper began his coaching career in the youth set up of the England national teams before a two-year spell at Swansea.
However, it was at Forest where he made his name, leading the two-time European champions back into the Premier League for the first time in 23 years.
That success, though, counted against him in the eyes of some Leicester fans, who booed him even before kick-off in his first match in charge against Tottenham.
Victories over Bournemouth and relegation rivals Southampton were not enough to ease that tension with the fan base.
A five game winless run, that included a League Cup exit to Manchester United, ultimately cost him his job with Leicester sitting 16th in the table.
Cooper becomes the second Premier League manager of the season to be sacked after United parted company with Erik ten Hag.
