The Reds finished fifth in the table, 25 points behind champions Arsenal, despite spending a Premier League record of nearly £450 million (US$605 million) on new players in one transfer window last year.
Outgoing Bournemouth boss Andoni Iraola is the frontrunner after leading the Cherries into Europe for the first time in the club’s history.
Just over a year ago Slot was heralded as a hero after taking on the daunting role of succeeding Jurgen Klopp and leading Liverpool to a record-equalling 20th English top-flight title in his debut season in charge.
Yet fans turned on the Dutchman this season after a series of lacklustre performances.
There was also sign of dressing room disharmony, most notably from Mohamed Salah who called for a return to “heavy metal football” in an explosive social media post, referring to Klopp’s high energy style of play.
Salah’s comments were liked by multiple members of the current squad.
Despite their troubles, it had been reported that Slot would be handed a stay of execution after securing Champions League qualification.
However, the club’s owners, the American-based Fenway Sports Group, have succumbed to fan pressure to axe the former Feyenoord boss.
“We have collectively come to the conclusion that change is necessary in order for the club to keep moving forward. Again, it must be stressed that this is not a decision which has been reached lightly, anything but,” the club said in a statement.
“The conclusion we have come to is built on a belief that the team’s trajectory is best addressed through a change of direction. That does not diminish the work Arne has done here, or the respect we have for him. Nor is it a reflection of his talents. Rather, it is indicative of the need for a different approach.
“Arne leaves with our gratitude, with a Premier League title to his name, and with the knowledge that he and his family will always be welcomed back at Anfield.”
Liverpool added that “the process to appoint a successor is under way.”
Many fans were keen for the return of Xabi Alonso to Anfield, but the club’s former midfielder will instead take charge of Chelsea next season.
Iraola’s stock is high after an 18-game unbeaten league run to finish the campaign in sixth, just three points behind Liverpool despite vastly inferior resources.
The Spaniard also worked together with Liverpool sporting director Richard Hughes, who previously held a similar role at Bournemouth.
Slot ultimately paid for failing to get a return on Liverpool’s huge investment last summer.
British transfer record signing Alexander Isak was beset by fitness problems, while Florian Wirtz struggled with the transition to the Premier League after a £100 million move from Bayer Leverkusen.
Slot, though, also had to deal with emotional turmoil caused by the death of forward Diogo Jota in a car accident in July. (AFP)