The Italian leaves the Stadium of Light after less than six months in the post following a poor start to the season.
The defeat leaves Sunderland bottom of the Premier League table with just one point from five games and with Liverpool and Manchester United the next visitors to the Stadium of Light in the league.
Before then the club faces Peterborough in the Capital One Cup with Sunderland confirming that Kevin Ball will take charge of the team for Tuesday's clash.
Di Canio replaced Martin O'Neill at the Stadium of Light in March and helped the club avoid relegation, Sunderland finishing the season in 17th position, three points clear of the drop zone.
The Italian then oversaw a busy summer in the transfer window bringing in 14 new players including the likes of Jozy Altidore, Vito Mannone, Sung-Yong Ki, Fabio Borini and Andrea Dossena.
However, despite the new arrivals Sunderland has endured a poor start to the season picking up just one point, away at Southampton, and suffering defeats at the hands of Fulham, Crystal Palace, Arsenal and West Brom.