Chris Brass has been dismissed as York manager but will continue with the club as a player.
Brass helped York stay in business but has been sacked as boss
York City managing director Jason McGill said: "The board of directors made the unanimous decision to relieve Chris Brass of his role as manager.
"It follows Saturday's home defeat to Forest Green Rovers and our disappointing start to the season."
Viv Busby, who recently returned to the club as a coach, has been installed as caretaker-manager.
Former Burnley defender Brass became the youngest League manager for 50 years when he was appointed at the start of last season at the age of 27.
He enjoyed an impressive start to management, but York's form slumped in the second half of last season.
And with financial and injury problems taking their toll, Brass was unable to stop the rot.