The champions are languishing in fourth position in the Airtricity Premier Division table and have taken the decision to replace the man at the helm
The former Derry City coach had been in charge of the Hoops for less than nine months after replacing current Northern Ireland manager Michael O'Neill and Kenny's assistant, Stephen Glass, will take temporary charge for Friday's FAI Ford Cup quarter final against Shelbourne.
Rovers are currently in fourth position in the League of Ireland Premier Division and suffered a 1-0 defeat to Bohemians on Monday night, prompting Kenny's departure.
The club which won back-to-back titles in 2010 and 2011 are currently 13 points behind league leaders Sligo Rovers with only six matches remaining of the 2012 season.
Furthermore, Rovers' Champions League campaign lasted only one tie with the side going down to Lithuanians FK Ekranas following last year's Europa League group stage adventure.
Shamrock Rovers chairman Jonathan Roche said: "We have not taken this decision lightly and we are extremely disappointed with the turn of events.
"However, the club feels that this is the right decision at this time, and attention now turns to Friday night's FAI Ford Cup game against Shelbourne and identifying the next manager of Shamrock Rovers.
"We would like to wish take this opportunity to wish Stephen the best for the future."