FA chairman David Bernstein has highlighted the side’s poor showing in the last two tournaments as the main reason for a change in coach
The news follows a dismal display by the Young Lions at the European Championship in Israel. Pearce's men lost all three games and failed to score a goal from open play in matches against Italy, Norway and host Israel.
FA Chairman David Bernstein said: "I'd like to thank Stuart Pearce for his hard work. Nobody can doubt his commitment to the job throughout his time as Under-21 Coach.
"He has done extremely well in qualifying for Finals tournaments, but after the disappointment of the past two tournaments, we believe it is time to change coach.
"On behalf of everyone at The FA I'd like to wish Stuart well for the future."
Bernstein added: "It is important the organization now considers the best approach for the role of Under-21 coach and how this works best within the overall England structure before making any new appointment."
Pearce has been in charge since 2007 and guided the team to four European U-21 Championship Final tournaments.