Villa are now looking for their fifth boss inside a year after deciding to replace the Italian, who won just one of 11 Championship games in charge.
Former Chelsea player and manager Di Matteo, 46, was appointed shortly after Chinese businessman Dr Tony Xia took over Villa on 2 June.
Di Matteo's assistant Steve Clarke will take over as caretaker
manager.
A club statement confirming the exit of former West Bromwich
Albion boss Di Matteo said: "The club decided to act following
a run of disappointing results which has the left the team
occupying 19th position.
"The club would like to place on record its appreciation to Roberto for all his efforts in helping rebuild the squad."
Former Birmingham City boss Steve Bruce, who still lives in
the Midlands, and ex-Wolves manager Mick McCarthy are
among the early favourites to replace him.
Ex-Walsall manager Dean Smith, now in charge at Brentford,
has already dismissed speculation about taking charge of the
club he supported as a boy.
Villa were booed off by their fans after Saturday's 2-0 defeat
at Preston - Di Matteo's final game in charge.
Former Villa striker Garry Thompson, who was the radio match
summariser at Deepdale, told BBC WM: "Once you lose the
support of the travelling fans and they turn on you, you're in
trouble."
Di Matteo, whose major success as a manager was winning
the Champions League with Chelsea in 2012, also enjoyed
success at Championship level when he won promotion with
Albion in 2010.
He is succeeded in the short term by his Villa assistant
manager Clarke, his former Chelsea team-mate, who also
spent a year and a half in charge at West Brom.
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