The Black Cats were looking for Parkinson to drive the side up to the upper reaches of League One and towards promotion to the Championship, but have concluded he is not the right man to take the team forward.
Sunderland said in a statement: “Sunderland AFC has today parted company with manager Phil Parkinson.”
The League One side also confirmed that assistant boss Steve Parkin has followed Parkinson through the door at the Stadium of Light.
Sunderland have put first team coach Andrew Taylor in charge ahead of Tuesday night’s meeting with Burton Albion in League One.
Parkinson leaves Sunderland having been in the job for 13 months and taken charge of 47 games across all competitions.
Sunderland currently sit in eighth place in the League One standings having picked up 23 points from 13 league games so far, putting them seven points off league leaders Hull City.
The Black Cats have gone five games without a win across all competitions, losing three matches.
The club are now starting their search for a new manager to take over.