The Tykes have made the call following back-to-back League One defeats against play-off rivals Charlton and Blackpool.
Despite their mini-blip in form, the Yorkshire outfit sit in tenth spot - just eight points off the top six with ten games to play.
But that is too big of a gap for club chairman Neerav Parekh, who insisted that results haven't been good enough.
He said in a statement: "We would like to thank Darrell for his efforts in a season which has been difficult for various reasons.
"Darrell has worked extremely hard to try and get the team competitive and pushing for promotion.
"Unfortunately, we find ourselves eight points away from the play-offs and feel that a change is needed."
Former Aston Villa midfielder Conor Hourihane, who retired at Oakwell last year, has been swiftly appointed as Barnsley's interim boss until the end of the season.
Hourihane, who spent five-and-a-half-years at Villa Park between 2017-2022, returned to Barnsley last summer on a player-coach role, but hung up his boots in December having failed to feature, and subsequently became Clarke's assistant.
News of Clarke's axing has taken Barnsley fans completely by surprise, as one X user posted: "Holy s*** this came out of nowhere."
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Another messaged: "Embarrassing!! Never backed once. Worst squad in years. Another fall guy for the Boards ineptness!"
A third added: "He isn't the problem. Not going to help."
This shocked fan then said: "Dunno what to say tbh!"
Another disgruntled supporter commented: "Stitched him right up, he did the best he could with the crap tools provided."
Meanwhile this fan simply stated: "Wrong decision. Problems are clearly deeper than the manager."
Clarke was only appointed at Oakwell in May 2024, where he penned a two-year contract with the option of a further 12 months.
He enjoyed a fine start at the club after overseeing four league wins from his opening seven matches, while a run of four successive victories over the Christmas period had fans believing a play-off spot could be in the bag.
However, five defeats from six fixtures between January 18 to February 15 threatened to derail the club's season, but that horror form was followed up by three wins on the bounce.
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But after the recent setbacks to Charlton and Blackpool, Clarke will not be given another chance to turn around Barnsley's fortunes.
He leaves the club having won 17 from his 44 matches in charge in all competitions - losing on 18 occasions.
Hourihane will now prepare for his first match as interim manager away at 18th-placed Mansfield on Saturday.