Aitor Karanka has departed as Nottingham Forest manager after crunch talks at the City Ground last night.
Karanka’s tenure at the City Ground is over after 12 months in charge following a meeting with Forest's board and owner Evangelos Marinakis.
It is understood Karanka was going to be sacked hours after the 3-3 draw with Norwich on Boxing Day, but received a stay of execution for Championship games against Millwall and Leeds, plus the FA Cup tie at Chelsea.
But the situation has flared up again this week, according to well-placed sources, and Karanka has asked to be released from his contract.
Forest say the relationship was irreparable, despite attempts to resolve the impasse between the two parties. It is claimed the Spaniard was "distant" in training sessions over the past two weeks.
Karanka spent over £23m in the summer, signing 17 players including record £13.2m signing Joao Carvalho, and was expected to be in the play-off places by January 1.
But Forest are seventh in the Championship despite their excellent win over Leeds on New Years Day, four points adrift of the top six.
Slavisa Jokanovic, the former Fulham manager, is already emerging as a strong candidate to replace Karanka, after rejecting an offer from Stoke earlier this week.
Karanka was appointed as Mark Warburton’s replacement in January this year and guided Forest to a 17th-placed finish.
Hopes were high after a mammoth spend but it has been a frustrating campaign with Forest's board believing the team should be doing better with the squad at Karanka's disposal.
Many Forest supporters were opposed to Karanka's dismissal and believe the former Middlesbrough manager should have been given more time to revive the club's campaign.
Forest's statement read: "Aitor Karanka has asked to be released from his contract as the manager of Nottingham Forest Football Club.
"The club have agreed to this request and the terms of departure have been agreed. Both parties wish each other every success for the future.
"There will be no further comment from either party.
"Simon Ireland will take charge of first-team affairs until a new manager is appointed."