Reid had come under increasing pressure following a poor start to the Premiership season, with the Black Cats currently 17th on just eight points from nine games.

Backroom staff Adrian Heath, Bobby Saxton, Tony Book and Mike Walsh have also left.

But striker Niall Quinn, also on the coaching staff, stays and could be an outside contender to replace Reid.

Chairman Bob Murray meanwhile revealed he hopes to have Reid's successor in place before their next game at home to fellow strugglers West Ham on 19 October.

He told Sunderland's website www.safc.com: "Sunderland is totally unrecognisable now to when Peter Reid walked through the door at Roker Park in 1995.

"In taking this difficult decision it's hard to realise that it has had to come to this, but the club must always come first.

"Nearly a quarter of the season has gone and we are at the wrong end of the table and can't wait any longer for performances to improve.

"We've invested more than �22m in the playing side in the last nine months but unfortunately results have not changed for the better since last season.

The Black Cats struggled last season and Reid was a constant target for angry fans.

Reid reacted by spending �3m on youngsters Stephen Wright from Liverpool and Leicester's Matthew Piper.

And he followed that with a �10m double swoop for strikers Tore Andre Flo from Rangers and Ipswich Town's Marcus Stewart.

Brief respite

But Sunderland still struggled for any sort of form and Reid was fiercely critical of his players after the 2-0 defeat in the North East derby against Newcastle.

A home win against Aston Villa and a 7-0 Worthington Cup win at Cambridge provided brief respite.

But Sunday's 3-1 defeat at Arsenal proved the final straw.

Along with current coach Quinn, former Leeds boss David O'Leary is among the early favourites to succeed Reid - with George Graham also appearing to declare an interest.

O'Leary said: "I'm gutted for Peter, but I'm an out of work manager and I'm happy to talk to anyone."

And Graham added: "I'm keen to speak to any club whose ambition matches my own."