Newcastle caretaker manager Glenn Roeder will be assisted by club captain Alan Shearer following the Magpies' decision to sack Graeme Souness.
The Magpies have won only one point in six Barclays Premiership matches and are only six points above the relegation zone.
A statement on the club's website, nufc.co.uk, said: "Newcastle United today announced that the employment of Graeme Souness has been terminated with immediate effect.
"An announcement will be made shortly regarding transitional arrangements pending the appointment of a new team manager."
Former West Ham boss Roeder, who had worked within Souness' back-room staff, will be caretaker boss starting with the weekend visit of Portsmouth.
And Newcastle hero Shearer will assist him.
A club statement read: "Newcastle United today announced Glenn Roeder will take charge of first team affairs for the immediate future.
"Roeder will be assisted by captain Alan Shearer and will be caretaker manager for Saturday's home Premiership game against Portsmouth."
The 3-0 defeat by Manchester City last night edged Souness even closer to the precipice as many Magpies fans called for his head.
After the defeat at Eastlands Souness admitted he was feeling the pressure due to the "passionate" support Newcastle receive.
"It's common knowledge in football that the supporters up here love their football club and it means so much to them. They are madly, madly passionate for their football club," said the Scot.
"That makes it so attractive, but when you are not winning games, that can mean there's a big downside to it as well, and you have to accept that.
"But it's a special place to be involved in the football at Newcastle. I think there are only two or three other clubs in the country where that passion exists."
Souness has been beset by injuries this season and having
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