Chelsea have ended speculation about the future of manager Claudio Ranieri by confirming his dismissal.
Ranieri's successor could be named as early as Tuesday, with Porto's Jose Mourinho almost certain to succeed him.
A Chelsea spokesperson said: "Claudio has done a first class job for the club and paved the way for future success.
"We would like to wish Claudio all the best for the future. We are discussing the exact terms of his departure with him and his representatives."
Ranieri had a contract until 2007 but had been tipped for the sack ever since Russian billionaire Roman Abramovich took control of the club last summer.
He maintained the support of the fans as he guided Chelsea to second in the Premiership, but it was not enough.
The Italian's representatives said Ranieri was keen to stay in England and manage another Premiership club.
Meanwhile his most likely successor, Mourinho, was said to be flying to London on Tuesday to finalise his deal with Chelsea.
Chelsea assistant manager Gwyn Williams insisted he "didn't know" if
Mourinho would be appointed.
He added: "It has been well-documented and
well-versed, but whoever comes in has got a tough task and I wish them well."
The pressure on Ranieri towards the end of the season - and the increased attention given to Mourinho - overshadowed the Italian's preparations for the Champions League semi-finals.
Defeat by Monaco effectively ended his hopes of staying at the club, although Chelsea achieved their highest league position for 49 years - second in the Premiership.
That meant they will not have to qualify for the Champions League next season.
Ranieri admitted he had said goodbye to his players after the 1-0 win over Leeds at Stamford Bridge on the final day of the season.
He had urged Abramovich to make a decision on his future then, saying: "I would like to finish my job here.
RANIERI'S CHELSEA RECORD
2001-02: 6th, FA Cup r-up
"I started this job, the house isn't finished yet, only the foundations and the ground floor."
Ranieri was appointed by former Chelsea chairman Ken Bates as Gianluca Vialli's successor in September 2000.
The club finished sixth in the Premiership in his first two seasons, and lost to Arsenal in the FA Cup final in 2002.
The Italian made light of Chelsea's financial problems to guide them back into the Champions League the following season.
But his failure to win a trophy after spending more than £100m of Abramovich's money last summer proved his undoing.