Leipzig lost heavily at home to Shakhtar Donetsk in their UEFA Champions League group stage opener on Tuesday.
The 4-1 defeat was the last straw that broke the camel's back as Leipzig continued a wretched start to the season.
Leipzig have won just once in their opening five Bundesliga matches to sit 11th on the table.
Tedesco was appointed in December 2021 to replace Jesse Marsch, with the Red Bull Arena outfit sitting 11th on the table, however he inspired a turnaround which saw them eventually finish fourth at the end of the season.
The former Schalke 04 boss led Leipzig to the first ever trophy in the club's history when they beat Freiburg in the DFB-Pokal final in May.
He also led Leipzig to reach the Europa League semi-finals last season.
An official statement from the club reads: "RB Leipzig have parted company with Domenico Tedesco with immediate effect. Assistant coaches Andreas Hinkel and Max Urwantschky have also left the club. RB Leipzig will announce his successor in due course."
