Chelsea have confirmed that manager Andre Villas-Boas has been sacked and that making a change was the club's 'only option'.
Villas-Boas only took charge at Stamford Bridge last summer following the departure of Carlo Ancelotti, but has endured a difficult time at the helm.
The former Porto coach arrived in West London with a reputation as one of the brightest managerial talents in world football, but he has been unable to replicate his past success at Chelsea.
He has seen the Blues slide out of the Premier League title race in recent weeks, while qualification for next season's UEFA Champions League is also in doubt.
Chelsea are also facing up to elimination from this term's Champions League after suffering a 3-1 defeat away by Napoli in the first leg of their last-16 clash.
There have also been reports of rifts between Villas-Boas and several senior players in the dressing room over the past couple of months.
A 1-0 defeat at West Bromwich Albion on Saturday proved to be the final straw for owner Roman Abramovich and Roberto Di Matteo has now been placed in charge until the end of the season.
A club statement read: "Andre Villas-Boas has parted company with Chelsea Football Club today.
"The board would like to record our gratitude for his work and express our disappointment that the relationship has ended so early.
"Unfortunately the results and performances of the team have not been good enough and were showing no signs of improving at a key time in the season.
"The club is still competing in the latter stages of the UEFA Champions League and the FA Cup, as well as challenging for a top-four spot in the Premier League, and we aim to remain as competitive as possible on all fronts.
"With that in mind we felt our only option was to make a change at this time.
"With immediate effect Roberto Di Matteo has been appointed first-team coach on an interim basis until the end of the season."
Villas-Boas had been under mounting pressure after overseeing what was threatening to be Chelsea's worst season since Abramovich bought the club almost nine years ago.
A run of just five wins from the last 16 games saw the Blues slide out of the top four, while they remain in real danger of crashing out of both the Champions League and FA Cup in the next week-and-a-half.
Brought in to revamp an ageing squad after winning an incredible quadruple at Porto last season, Villas-Boas' reign was dogged by reports of the kind of dressing-room unrest that previous Chelsea managers have said led to their own downfall.
Who should be the next Chelsea manager?
Roberto Di Matteo