Flores replaced Javi Gracia in early September four games into the season but has failed to mastermind an upturn in form for the Hornets.
Flores led Watford to their only league win in early November –a 2-0 away triumph at Norwich City –but that remains their only victory of the season so far after 14 attempts.
Saturday’s 2-1 loss at fellow relegation rivals Southampton left Watford six points adrift the relegation zone.
“With regret, Watford Football Club confirms the departure of Quique Sánchez Flores,” read a statement from chief executive and chairman Scott Duxbury.
“Quique is a man of great integrity and it was clear how much he wanted to have a positive impact, but ultimately results have dictated our decision.
“The appointment of a new head coach is imminent, and with nearly two-thirds of the season remaining, we will provide all the support necessary to make the coming months successful.”
There have now been four managerial casualties in the Premier League this season and Watford have accounted for half of those dismissals.
Flores previously spent time at Vicarage Road, leading Watford to 13th place and the semi-finals of the FA Cup in the 2015/2016 season, but departed the club following disagreements with the board at the end of the season.
The search for Watford’s third manager of the season has already begun with former Brighton and Hove Albion boss Chris Hughton heavily linked with taking over.
