Graeme Murty has been sacked as Rangers manager following Sunday's 5-0 hammering by Scottish champions Celtic.
"He will take some time to consider his options, which include returning to his role at the Rangers academy," said the Glasgow club.
In December, the 43-year-old had been given the job until the end of the season after a spell in interim charge following Pedro Caixinha's sacking.
But he has now been "relieved of his duties".
Rangers' next game is at home to Kilmarnock and the club said assistants Jimmy Nicholl and Jonatan Johansson will "take charge of the team for the three remaining matches of the season".
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Former Reading and Scotland full-back Murty had expressed his desire to continue in the job, but Rangers have been in talks about appointing Liverpool youth coach Steven Gerrard for next season.
"The club hopes to be in a position to comment further on the managerial situation in the near future," Rangers said.
"Rangers are grateful to Graeme, who did not hesitate when asked last October to become interim manager after the departure of Pedro Caixinha, and then, at the turn of the year, when he was offered the role as manager until the end of the season.
"Graeme has had to contend with difficult and challenging circumstances but conducted himself in a thoroughly professional manner."
Murty was first promoted from his role as development squad manager when Mark Warburton left the club in February 2017 before joining Nottingham Forest.
Having reverted to his previous role, he stood in for a second time when Caixinha exited in October.
When Aberdeen's Derek McInnes rejected an offer to be Rangers manager, Murty was told he would remain in charge until the end of the season.
However, before this month's Scottish Cup semi-final against Celtic, chairman Dave King released a statement saying the club were looking to make "the best appointment they can make" for next season.
It was widely interpreted as a suggestion that Murty would not be in charge for the next campaign.
Rangers went on to suffer a 4-0 defeat at Hampden against their Glasgow rivals, after which club captain Lee Wallace and veteran striker Kenny Miller were suspended by the club following a dressing-room disagreement with Murty.
Then, before Sunday's final league derby of the season, it emerged the Ibrox club were in talks with former Liverpool and England captain Gerrard.
Murty said in a pre-match interview that the speculation had affected him personally and his team went on to lose even more heavily at Celtic Park than they had done in the cup, as Brendan Rodgers' side secured a seventh consecutive league title.
Rangers did not make Murty or any of his players available for interview after Sunday's game, despite a requirement from the Scottish Professional Football League.
Rodgers subsequently expressed sympathy for his counterpart, saying Murty had been "thrown to the garbage" and been treated with disrespect.
Rangers lie third in the Scottish Premiership, three points behind Aberdeen and level on points with Hibernian.
They travel to face their two rivals for the runners-up spot - the Dons and then Hibs - in their final two games of the season.