Koeman replaced Quique Setien in August 2020 but has failed to make an impact at Camp Nou as he battled with Barca's dire financial situation, which led to Lionel Messi departing for Paris Saint-Germain.
Barca is ninth in LaLiga after 10 games and the midweek defeat to Rayo Vallecano proved the final straw.
That loss followed on from a 2-1 home reverse at the hands of Real Madrid in El Clasico, with Koeman's vehicle mobbed by an angry group of Barca supporters after that match.
Barca's form in the Champions League has also been poor. The Blaugrana lost 3-0 to Bayern Munich and Benfica respectively in their opening matches, before clinching a 1-0 home win over Dynamo Kiev.
It is the first time Barca has opened with two losses in the competition, while the defeat to Benfica also inflicted back-to-back group game losses in a single season for the first time since 2000-2001, with only Louis van Gaal (five) losing more such matches at Barca's helm than Koeman (three).
After each passing poor result, Koeman has conceded his future is out of his hands, though he argued the performance against Rayo did not befit the result.
Yet Barca's board decided to cut ties, with its decision confirmed early on Thursday morning local time.