The 52-year-old has parted company with the Candystripes after winning just two of his side's first 12 SSE Airtricity Premier Division games
The 52-year-old guided the Candystripes to just two wins in their first 12 games this season after succeeding Declan Devine at the Brandywell. Derry City chairman Peter O'Doherty confirmed Collins' departure from the club, with Peter Hutton set to take over as caretaker manager until the club's board meet later this week.
A club statement confirming the departure read "Derry City FC wish to thank Roddy for his service, and we wish him well for the future."
Collins guided Athlone Town to the SSE Airtricity First Division last season, but a slow start to his Derry City career saw him come under pressure from the club's fans, while the repeated omission of last season's top scorer Rory Patterson also did little to win favour with the supporters.
Former Derry City winger James McClean said that the depature was inevitable, tweeting that Collins' exit was caused by "poor signings, negative tactics/team selection e.g his son dear me, ego was bigger than club."