Beale has paid the price for Rangers' unconvincing start to the season, which has seen them lose three of their first seven league matches.
Rangers are already seven points behind leaders Celtic.
Saturday's 3-1 home defeat to Aberdeen proved to be the straw that broke the camel's back for Beale.
Rangers also suffered a heavy 7-3 aggregate defeat to PSV in the Champions League qualifying phase.
The 43-year-old was appointed in November last year as a replacement for Dutchman Giovanni Van Bronckhorst, signing a contract until the summer of 2026.
“Rangers can confirm it has parted company with men’s first-team manager Michael Beale,” the club statement said.
“The Rangers board would like to put on record their thanks to Michael and his staff for their efforts since joining the club last November. Results this season have fallen short of what everyone connected to Rangers would expect.
“Therefore, the decision was reached today to terminate the contract of the manager, as well as the contracts of coaches Neil Banfield, Damian Matthew, Harry Watling and Jack Ade. The club is pleased to announce that Steven Davis will lead the interim management team. The team will consist of former Rangers player and hugely experienced coach Alex Rae, former player and current coach Steven Smith, coach Brian Gilmour and goalkeeping coach Colin Stewart.”
The Rangers chairman, John Bennett, said: “I’d like to thank Michael for his dedicated work since he rejoined the club as manager last November.
“It is clear that results have fallen well short of the board’s, Michael’s and our supporters’ expectations. The search process for the new manager is already under way. I wish Steven Davis and the interim management team every success – they will remain in charge for as long as it takes to make the right appointment.”
