After winning only three of the club's last seven league matches, the Portuguese champion has dropped to third place and finds itself nine points behind Benfica.
Fonseca's exit was announced on Wednesday, with the club confirming that Luis Castro, coach of the club's B side, will take over as interim boss.
Former Porto defender Fonseca promised to keep on fighting after the team suffered a first home league loss in more than five years at the hands of Estoril last month.
However, he was unable to turn things around, with his side mustering draws against Eintracht Frankfurt in the UEFA Europa League - in a tie that saw the team progress on away goals - and Vitoria Guimaraes in the Primeira Liga on Sunday.
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