One win in nine games - including defeat on Monday to bottom-of-the-table Catania - has seen the 48-year-old lose his job, with Davide Ballardini reportedly set to replace him.
On Monday, the Rossoblu - who sit one point above the relegation zone in Serie A - kicked off 2014 in the worst fashion as they were beaten 2-0 by bottom-of-the-table Catania.
That defeat ultimately signalled the end for Pioli, who has been in charge at the Renato Dall'Ara since Oct. 2011 when he replaced Pierpaolo Bisoli.
"Bologna can announce that, in light of recent disappointing results, the club is forced with great regret to dismiss first-team coach Stefano Pioli," the club stated on its website.
"We sincerely thank Pioli and his staff for the work done over the years with great professionalism, passion and a rare attachment to the fate of our club.
"In the coming hours will be announced as the new coach"
Pioli guided Bologna to an impressive ninth-placed finish in his first campaign in charge, though it could only manage 13th at the end of last season.
The former Parma and Chievo coach is set to be replaced by Davide Ballardini, according to initial reports in Italy.