PSV suffered a humiliating 3-1 defeat to Feyenoord in the Dutch Eredivisie on Sunday which left them fourth on the table, ten points behind leaders Ajax Amsterdam.
Van Bommel was appointed as PSV manager in the summer of 2018, replacing Philip Cocu in the role, and he led them to second place in his first season in charge, only missing out on the title to Ajax on the final day of the season.
This season, things have been more difficult for Van Bommel with Sunday’s loss being their fourth defeat of the season.
PSV also failed to make it to the knockout stages of the Europa League, finishing third in a group that included LASK Linz, Sporting Lisbon and Rosenborg.
“The decline is too large and unworthy of PSV,” general manager Toon Gerbrands told the club’s official website.
“The competitions are the measuring [sticks], but the process around them is also decisive. We monitor this intensively.
“PSV is a club where we try to help and support each other. That has also been the case in recent months.
“The club’s interest has always been paramount. The evaluation ultimately resulted in this painful decision. We have all done everything to turn the tide. Unfortunately, we did not succeed.”
Van Bommel had two spells at PSV as a player, winning four league titles and also had a stint at Barcelona, where he won La Liga and the 2006 Champions League.
The 42-year-old became Bayern Munich's first ever non-German captain and won two Bundesliga titles in Bavaria.
PSV are looking to appoint a caretaker manager later on Monday.
