Former England boss Eriksson joined City last summer
Manchester City have parted company with Sven-Goran Eriksson, ending weeks of speculation over the Swede's future.
BBC Sport revealed in April that Eriksson was no longer wanted by owner Thaksin Shinawatra, despite City finishing ninth in the Premiership.
And City have asked Blackburn Rovers for permission to speak to Mark Hughes.
Rovers have "reluctantly agreed" to let their manager Hughes hold talks with City after the Welshman expressed an interest in taking over from Eriksson.
"Mark has made it clear to the board he would like the opportunity to talk to Manchester City," read a Rovers statement.
"In view of this the board have decided reluctantly to give permission, subject to terms and conditions acceptable to Blackburn Rovers being agreed in advance."
The Welshman has guided Rovers into Europe twice and is now firm favourite to replace Eriksson, who only took over as City manager last summer and who still had two years left on his contract.
Eriksson's assistant Hans Backe and first team coach Tord Grip have also left City.
Upon his departure, the former England manager said: "I have enjoyed my time at Manchester City very much and I would like to thank the fans, players and staff for their amazing support."
City chief executive Alistair Mackintosh added: "The board of directors and all at Manchester City would like to thank Sven for his efforts and contributions throughout the season.
"We wish him well for the future. Sven remains a friend of the club."
City occupied third spot in the Premiership in November, but former Thailand Prime Minister Thaksin was unhappy with City's results since the turn of the year.
City's form faltered badly after Christmas, although their ninth-place finish was enough to win them a Uefa Cup berth, albeit via the Fair Play League.
Thaksin bankrolled eight summer signings at a cost of more than £46m shortly after buying the club but his relationship with Eriksson soured in the second half of the season.
City's players are understood to have reacted with a mixture of shock and anger when Eriksson told them he would be leaving in April and he had the support of the majority of fans.
And City defender Micah Richards told the BBC that the players were "100% behind" Eriksson, who is thought to have been lined up as the next manager of the Mexican national team.
Thaksin now has to find a new manager before the new season starts in August and Portugal coach Luiz Felipe Scolari and recently ousted Chelsea boss Avram Grant have also been touted as a possible replacement.
It seems certain that any new manager will have a considerable amount of money to spend in the summer.
Thaksin has hundreds of millions of pounds worth of assets frozen as he awaits trial on corruption charges later this year.
But his former lawyer Noppadom Pattama, who is now Thailand's foreign minister, told BBC Sport that he expected these assets to be unfrozen in the near future.
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