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Garcia's dismissal comes following a 3-2 loss to Barcelona that made it six games without a win in LaLiga.
Valencia took the lead in Sunday's game through Gabriel Paulista, only for a Lionel Messi double sandwiched by an Antoine Griezmann effort to put Barca in command before Carlos Soler replied.
OFFICIAL STATEMENT | JAVI GRACIA— Valencia CF 🦇🍊🌊 (@valenciacf_en) May 3, 2021
It will likely avoid the drop, but still have work to do as Valencia sit just six points clear of the relegation zone with four games to go.
Voro will return for a third spell as interim boss, having also been in caretaker charge three times and held the position permanently once in 2016-2017.
Gracia, who was only appointed last July, had a win percentage of 23.53 in the league, the lowest for a permanent Valencia coach since Cesare Prandelli resigned after eight LaLiga games in 2016 with just one win to his name (12.5 per cent)
Valencia hosts Real Valladolid in a key game at the bottom of the table at Mestalla on Monday (AEST).