The American was hired at the end of February 2022 following the dismissal of Marcelo Bielsa but suffered the same fate less than a year later.
Marsch steered Leeds to Premier League survival last season, after Bielsa was shown the door with the Whites only two points above the bottom three.
It was hardly an emphatic end to the season, however, with Leeds' 2-1 win over Brentford on the last day of the campaign ensuring its safety in 17th place.
Leeds lost key players Raphinha and Kalvin Phillips in pre-season, but those departures contributed to Marsch being able to invest heavily in the squad.
Including the January additions of Maximilian Wober, Georginio Rutter and Weston McKennie, who arrived on loan last week, the West Yorkshire club are reported to have spent £129million this season.
Many of those to arrive were known to Marsch, who had previously worked with three Red Bull franchises: RB Leipzig, Salzburg and New York Red Bulls.
Four of its signings this term came from those teams, highlighting how Marsch was entrusted to build a squad in his image.
But he leaves the club having not overseen a Premier League win since before the World Cup, with the 4-3 defeat of Bournemouth on 6 November (AEDT) its last victory.
Since then Leeds has failed to win seven successive matches, though even that is not its worst winless run of the campaign – after beating Chelsea 3-0, it managed just two points from eight games.
The final straw came in Monday's 1-0 defeat at Nottingham Forest, when a section of Leeds fans could be heard chanting for Marsch to leave.
The loss left them only out of the relegation zone on goal difference, though Everton – level with it on 18 points – has a game in hand.
Marsch's coaching staff have also been dismissed, with the process of appointing a new head coach already under way.
The Leeds hierarchy took action ahead of a Premier League double-header with bitter rival Manchester United.
