The 19-time Serie A winners lost 2-1 at home to Cagliari on Sunday in the final game of the league game season denying them a return to European football’s leading competition.
Allegri was appointed last May, returning to the northern club 11 years following his first tenure ended, after they also failed to qualify for the Champions League.
“After the disappointment of last year, the mandate ownership set for the club was to return to the Champions League and to establish a foundation for winning consistently at the top of Serie A,” AC Milan’s owners RedBird capital said.
“It is now time for change and a comprehensive reorganisation of football operations.
“Effective immediately, we are parting ways with CEO Giorgio Furlani, sporting director Igli Tare, head coach Massimiliano Allegri and technical director Geoffrey Moncada.
“We thank each one for their hard work and dedication to AC Milan during their respective tenures.
“Further announcements regarding the next appointments will be made in due course, with the goal to be ready and well prepared for the next season,” they added. (AFP)