A series of poor results has left the club in 16th in the Premier League table, two points clear of the relegation zone, though Burnley and Everton both have two games in hand over them.
Leeds have conceded 60 goals in their 26 games this season, the most in the division, and have picked up just a single point from their last six games.
The 4-0 defeat to Tottenham at Elland Road on Saturday afternoon proved to be the last straw for Bielsa, who saw his side ship six goals to Liverpool and four to Manchester United in the two games prior.
Leeds now have to appoint a manager for the first time since 2018.
talkSPORT understands that the club have identified former RB Leipzig and Red Bull Salzburg boss Jesse Marsch as their top target.
For Leeds fans though, it is a sad end to a fairytale period under Bielsa, whose iconic status is assured after four memorable years in Leeds.
After a 16-year exile from the top division, he was the man to bring the Whites back into the big time with promotion to the Premier League secured in 2020.
They thrived back in the top-flight, gaining a reputation as one of the most entertaining teams in the 2020/21 season as they finished ninth and claimed some major scalps along the way.
They took four points off Manchester City, who would go on to become champions, beat Tottenham at Elland Road and earned draws against Manchester United, Liverpool, Chelsea and Arsenal.
This season, though, things have been very different and Bielsa has been unable to turn the tide.
He has been hampered by injuries to key men, including Kalvin Phillips and Patrick Bamford, but Leeds' form has been woeful.
They have shipped goals at an alarming rate and the latest crushing defeat to Tottenham means they are in real danger of relegation.
Now the board and Bielsa have mutally decided to part ways.