Mel had been with the club since 2010 and took them back to the top flight in the 2010-11 season before securing a Europa League spot after finishing an impressive seventh last season.
However, while Betis sit second in Group I and well placed to progress in the continental competition, their domestic form has been terrible in this campaign.
Mel leaves the club rock-bottom in the table, having won just twice from 15 games and failed to win any of their last eight league matches, during which time the club suffered a painful 4-0 derby defeat against Sevilla.
In a statement on their official website, Betis confirmed: "Juan Carlos Garrido is the new coach of Real Betis until the end of the season and will take the reins of the team tomorrow.
"The club is fully confident the decision will give the team the boost they need to recover winning ways."
Garrido, a former coach at Villarreal, took charge of Club Brugge last November and guided them to the brink of the Belgian title last season.
Betis confirmed Garrido's backroom staff would also be joining him at the club, while Roberto Rios and David Gomez, members of Mel's team, have moved on.