The former Liverpool captain lasted less than one year in the role, with Villa currently one place above the relegation zone.
The West Midlands club have only won two of their 11 Premier League matches this season.
Gerrard was appointed Villa manager in November last year to replace Dean Smith, with the club 17th on the league table. The former Rangers boss eventually led Villa to a 14th place finish.
In September, Gerrard said he feared for his position at the club after losing four of their opening five league matches but before the Fulham game, he insisted he was determined to turn things around.
Gerrard's dismissal was confirmed in a statement on the club's website after full-time, that read: "Aston Villa Football Club can confirm that Head Coach Steven Gerrard has left the club with immediate effect."
A club spokesperson added: "We would like to thank Steven for his hard work and commitment and wish him well for the future."
Reports this week have linked former Tottenham Hotspurs and Paris Saint Germain manager Mauricio Pochettino with the club when Gerrard came under pressure.
Gerrard is the Premier League's fourth managerial casualty this season after Scott Parker, Thomas Tuchel and Bruno Lage.
Aston Villa will begin life without Gerrard with a home game against Brentford on Sunday.
